Ten EU members call for single market overhaul to boost competitiveness

(C) Reuters. European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron

By Jan Strupczewski

BRUSSELS (Reuters) – Ten European Union countries called on Wednesday for an overhaul of the EU’s single market to make the bloc more competitive against the United States and China in the clean energy sector.

The call came in a letter to the executive European Commission, which can propose new EU laws, from the prime ministers of Belgium, Czechia, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Slovakia.

“Political attention has been focused on short-term measures in view of high energy prices and more assertive global competition in the clean tech sector,” the 10 EU leaders said in the letter, seen by Reuters.

“What the European Union needs now is a strategy on long-term competitiveness to keep up with our main global competitors in terms of economic output and productivity,” they said urging the topic to be discussed at the next EU summit on March 23-24.

They said the economic fallout of the COVID-19 pandemic, the Russian invasion of Ukraine and the U.S. Inflation Reduction Act had put problem of European competitiveness in the spotlight.

“Europe needs a long-term strategy for competitiveness and productivity, which complements the Commission’s latest initiative of the Green Deal Industrial Plan,” the letter said.

The letter said the EU single market needed an overhaul, noting that the EU services sector, which generates more than two thirds of Europe’s gross domestic product, was particularly important along with “clean tech” industry, such as battery production or hydrogen installations.

The leaders said stress should be placed on increasing productivity and growth.

They also urged faster progress on the EU’s Capital Market’s Union project, which aims to make it easier for companies to tap private capital, but which has seen slow progress since 2014 because of differences between the 27 EU governments.

“Reducing barriers and improving functioning of capital markets would improve capital allocation and support our companies and hence EU’s competitiveness,” it said.