Frank Heemskerk / Feb 2022
Inflation. Rising energy costs. Geopolitical tension. Technological step-change. You’d be forgiven for thinking we have travelled back in time. Adding to this sense of déjà vu, the European Round Table for Industry (ERT) is revisiting its original raison être – the reason it was first established in 1983 - the Single Market.
If you talk to Europeans about what they remember from the 1980’s, one of the things that is less likely to cross their minds is that there was no free movement of people, goods, services and capital. And yet, if – as occurs in the Back to the Future films - you were to climb into Doc Brown’s DeLorean time machine and actually travel back to that time, the realities of life without those freedoms (and come to think it, a single currency) would hit pretty quickly.
While there may now be a couple of generations who have no sense of what life was like pre-1992, many European CEOs & Chairs in ERT certainly do. To call the Single Market ‘transformative’ seems like a simple understatement, but it does encapsulate what happened. Markets opened up. Rules were harmonised. Liberalisation transformed state and semi-state bodies by obliging them to compete with the more efficient private sector. Consumer choice flourished. Cross-border trade and tourism thrived and foreign direct investment soared. Education boomed and Europe stayed relevant and thrived in various sectors.
Three decades on, the harmony that sounded at the dawn of the Single Market has begun to fade in and out. Discord is creeping in, as countries increasingly pursue divergent approaches to emerging policy issues. National governments are undermining EU legislation with additional conditions and measures. We’re at the point where urgent maintenance, realigning and reinvestment is needed.
Single Market implications for the twin transitions
Climate change and the energy transition it demands require a fresh and relevant approach that is in step with the technology and consumer trends of our time. As a future built and run on renewable energy is the vision, the infrastructure, legislation and distribution have to be fit-for-purpose. Here an Energy Union within the Single Market is the logical platform. On a related environmental track, product and recycling labelling need a shake-up, to restore harmony and ensure we’re not missing the opportunity to build a fully functioning circular economy in which even waste could cross intra-EU borders to achieve economies of scale for its effective treatment. All of this would reinforce the ambitions of the EU’s Green Deal.
Geopolitical self-awareness is also a factor. Consider the digital transition. How can Europe hope to keep up with the agility of more fully-formed single markets such as the US and China, when 5G rollout is behind schedule and patchy? Cloud computing has risen to become dominated by hyperscalers from other continents – the EU needs to catch up. Solutions for building construction & maintenance and innovations in health technology are emerging as extraordinary opportunities for European business and citizens, yet both require bold and visionary moves towards pan-European interoperability. Here again, the Single Market holds the key.
To compile these examples – and many more – ERT asked its Members to provide clear examples of areas where the Single Market is not (yet) performing as it should. Discrepancies, irregularities, inefficiencies. Problems from the present and looming on the horizon at this time of twin transitions. In total, we gathered 30 stories, each by a different CEO or Chair in ERT. They reflect Single Market challenges across a wide spectrum of industrial and technological sectors. The issues raised are strikingly accessible and could even be resolved without treaty change. Ultimately, they illustrate existing barriers within the EU which need to be removed. The European Commission’s calculations find that deepening the Single Market would create an economic boost of over €700 billion between now and 2030 – a budget-neutral gain that every national government should be willing to get behind.
Securing the future
This isn’t just about addressing issues affecting the big companies led by the Members of ERT. Many of the problems highlighted weigh on SMEs and start-ups. For example, a functioning Capital Markets Union would stimulate cross-border investment in the EU, affording more European start-ups the possibility to secure investments to scale up here, rather than heading to Silicon Valley in pursuit of fame & fortune.
But let’s get back to where we are: 2022. Right now, the focus is justifiably on exiting the pandemic, securing economic & social recovery and remaining competitive on a global stage that is wobbling with geopolitical agitation. As with any challenging moment, we need to remember our strengths, to take confidence from our past successes and remember that our future is still unwritten. Investing time, effort and political capital in renewing the dynamic of European integration to deepen the Single Market might sound like going back in time, but it would strengthen Europe’s economy and its place in the world and ultimately secure our future.
Read ERT’s analysis, recommendations & Single Market stories at: ert.eu/single-market/