The EU Single Market was established more than 30 years ago. With 450 million consumers and 26 million businesses, it accounts for 18 % of the global economy. With a gross domestic product of 18 trillion Euro, Europe is now the world's second-largest economy. One of the objectives of the Single Market is to enable unrestricted trade throughout the EU. Tariffs between Member States have long since been abolished. However, companies continue to brand different national regulations, for example in company, tax and labor law, as obstacles for the market, hence they still speak of 27 ‘separate markets’.

The new Single Market Strategy aims to deepen the EU Single Market as a counterweight to global market uncertainty and as a driver of European competitiveness. The Commission estimates that a 2.4% increase in trade between EU countries would offset the 20 % decline in US exports caused by tariffs.

The new Single Market Strategy for the next five years, presented by the European Commission on 21 May 2025, is based on previous debates. In April 2024, the report ‘Much more than a market’ was published by former Italian Prime Minister Enrico Letta. In response, the European Council called on the European Commission to further develop the recommendations contained therein and to present a detailed roadmap. The new strategy is also closely linked to the Draghi report on EU competitiveness and the recently presented Competitiveness Compass.

A Single Market for businesses

The new Single Market Strategy is based on nine pillars designed to make the EU Single Market “more simple, seamless and strong”. The first priority is to remove the ten barriers identified by businesses as the “terrible ten”, such as complex EU rules, limited recognition of professional qualifications, lack of common standards, restrictive and diverging national services regulation, burdensome rules for posting of workers in low-risk sectors, and unjustified territorial supply constraints.

This is accompanied by a new focus on strategically relevant services, as services account for a large part of the European economy; however, cross-border trade in services is currently stagnating. This will come with a stronger focus on SMEs and start-ups. A new category of ‘small mid-cap companies’ (SMCs) will be introduced, comprising companies with fewer than 750 employees and an annual turnover not exceeding 150 million Euro. This will enable a further 38,000 companies to benefit from certain advantages that were previously only available to SMEs with up to 250 employees. In addition, the aim is to reduce the data protection rules for the new mid-cap companies.

In addition, there is a fourth omnibus package for businesses, which, according to the EU Commission, is intended to simplify existing regulations and make digitalisation the norm. A separate legal framework (“28th regime”) is intended to make it easier for businesses to operate in all Member States. The aim is to save businesses 400 million Euro in administrative costs each year. In order to hold Member States accountable for implementing these plans in a coherent manner, the EU Commission is pushing for better implementation of EU Single Market rules on the one hand and for more ‘national responsibility’ on the other. Each Member State is to appoint a high-level representative for the Single Market – a ‘Single Market sherpa’ – to oversee the application of Single Market rules. The last two pillars relate to a more targeted focus of EU funding and strengthening safeguards against unfair trading practices. The Commission plans to take stock at the end of 2026 and, if necessary, submit a new proposal in 2027 to prevent barriers to the Single Market.

Different points of view in the EU Parliament

Following the publication of the Single Market Strategy, a debate between MEPs and the responsible Commissioner, Stéphane Séjourné, took place on 21 May during a mini-plenary session of the EU Parliament. Conservative and Liberal MEPs in particular welcomed the measures presented and called for less market fragmentation and further deregulation. Progressive forces warned that market liberalisation, with its focus on reducing trade barriers and promoting free markets, could potentially lead to a weakening of social and environmental protections and that regulations could be dismantled without assessing the social impact. They advocate a broader approach that includes social justice and environmental considerations.

Chamber of Labor warns against erosion of important protective rights

AK makes it clear that fundamental rights of employees and consumers must not be undermined and warns against setbacks in respect of data protection or safety and sustainability labelling. In addition, the consequences of the proposed 28th regime for national labour, tax, consumer and social rights are unclear. There are fears that this will lead to a downward spiral. AK calls for investment in social and ecological restructuring and modernisation of the energy and rail networks instead of dismantling protection standards. The further development of the Single Market must not be at the expense of working people. Instead of watering down the rules on posting of workers to other Member States, AK calls for more effective measures to combat cross-border wage and social dumping. What is needed is a Single Market Strategy that offers greater security and protection for all. This includes strong workers and consumer rights, legal certainty in planning, and modern, climate-friendly infrastructure.

Further information:
AK Vienna: AK zu Binnenmarktstrategie: “Vertrauen starken statt Schutzstandards abbauen” (AK on the Single Market Strategy: ‘Strengthening trust in stand of dismantling protection standards)  (German only)
ÖGB: Katzian: Stärkung des EU-Binnenmarkts nur mit besseren Arbeitsbedingungen – nicht durch deren Abbau (Strengthening the EU internal market only possible with better working conditions – not by dismantling them) (German only)
Socialists & Democrats: S&D on the EU Single Market Strategy: consumers’ and workers’ rights cannot be used as a bargaining chip at the service of competitiveness
AK EUROPA: "Much more than a market". Leave no one behind in the Single Market
POLITICO: Brussels tries (again) to build its elusive Single Market