Despite its goal of being a single market, the European Union is plagued by internal barriers that the IMF estimates are equivalent to tariffs of 44% on goods and 110% on services. These obstacles, which include a maze of differing national rules on everything from waste shipment to product labelling, create significant costs and complexities for businesses.
For example, the materials group Umicore can spend over a month navigating varied regulations just to transport electronic waste for recycling between EU countries. CEO Bart Sap notes this complexity is so high that 73% of the EU’s waste is exported rather than managed internally. Similarly, paint maker AkzoNobel cannot sell the same product across the bloc due to conflicting labelling requirements. The services sector is even more fragmented, with thousands of regulated professions making it difficult for professionals like engineers or doctors to work in other member states.
According to a report by former Italian PM Enrico Letta, this fragmentation prevents EU companies from scaling up to compete with global rivals. While politically difficult to solve due to vested national interests, there is a renewed push for reform. Analysts and Letta himself argue that the external pressure of Donald Trump’s tariffs has provided the necessary motivation for the EU to deepen its single market. In response, the EU Commission is now actively working to eliminate the ten worst barriers, with multiple legislative proposals aimed at unifying the markets for services and capital expected in 2025 and 2026.
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