We must replace the one market quick, former Italian PM Enrico Letta says | EUROtoday

Get real time updates directly on you device, subscribe now.

Issued on:

Is the EU’s single market failing? Faced with rising competitors from China and the US, the bloc is falling behind. The union has been counting on the one market to ensure the free motion of products, capital, companies and other people for greater than 30 years. But inertia is creeping in, and it’s time for a brand new single market, says our visitor Enrico Letta, a former prime minister of Italy, president of the Jacques Delors institute and creator of a high-level report on the single market’s future. He has simply introduced the report back to EU leaders, after lots of of conferences in dozens of European cities, wherein Letta tried to gauge the place the market is delivering for folks – and the place it is not.

Letta argues that too many individuals will not be benefiting from the one market, which is “perceived as a great opportunity for big companies but less of an opportunity for small and medium-sized enterprises (SMEs). That’s why I put in the report many ideas to help SMEs. The most important of those is a simplification, to avoid having to change legal regime between different countries.”

He elaborates: “The cosmopolitan part of our society is very happy with the single market. But there’s a large part of society that is less mobile, and thinks that the market is not adapted to them.”

The former Italian premier requires a fifth freedom to be added to the one market, on high of the 4 founding ones – freedom of products, companies, capital and labour – which might be targeted on enhancing analysis, innovation and training.

“The lack of innovation is one of the reasons why we are lagging behind the US and other parts of the world,” Letta explains. “We need to scale up investments and innovation. We need to encourage the circular movement of researchers and scholars in Europe; not only going from east to west and from south to north, as is the case today. The fifth freedom would be a boost for the future of the single market.”

Letta says he tried to inject a way of urgency into his report. “We have to be very fast in introducing the big changes at the European level, at the single market level. Otherwise, inertia means decline for Europe,” he says. He takes the instance of power, telecoms and finance.

“The main point is how to integrate the sectors where the single market wasn’t integrated until now, because these three sectors – financial markets, energy and telecoms – are the main sectors in terms of competitiveness. And today we are lagging behind because we are not integrated. We are in reality 27 markets, and we are too small to compete with the Chinese and the Americans.”

Letta admits that the political hurdles to extra integration in these areas are “very big”.

“First of all, because of the idea of national sovereignty, which everyone wants to defend,” Letta explains. “But in reality, we have to have a European sovereignty on these topics. It’s the only way to be economically secure. And the most important part is related to financial services, because today, everything that is finance is going to the US. We are too small; too fragmented and so less competitive. On the integration of the financial market, I propose to launch the Savings and Investments Union, as the only way to finance the green, digital and just transitions. That is the most important choice for the European Union in the coming years.”

Programme ready by Agnès Le Cossec, Paul Guianvarc’h, Perrine Desplats and Isabelle Romero