When the European single market was established on Jan. 1, 1993, it represented one of the most ambitious visions of economic integration the world has ever seen. It aimed to guarantee the free movement of goods, services, labor and capital across what would in time grow to become 27 EU member states, as well as the European Economic Area comprising Norway, Iceland and Liechtenstein. Alongside the establishment of a border-free zone for people via the 1985 Schengen Agreement and the creation of a common currency for much of the continent, the single market has been hailed as a core tenet of the European project that “facilitates trade between businesses, stimulates growth and boosts innovation, while making citizens’ lives much easier,” according to the European Commission.
Yet while the single market has undoubtedly reduced trade barriers and increased freedom of movement across the bloc, it is still very much a work in progress. In recognition of that reality, the EU last May unveiled long-awaited policy proposals to strengthen economic integration across the bloc. The new Single Market Strategy aims to boost competitiveness by making trade and economic activity inside the bloc simpler and more seamless. Yet so far, it shows little sign of being able to overcome the myriad obstacles that have bedeviled Europe’s decades-long push to complete the single market.
Particularly problematic is the services sector, which accounts for two-thirds of EU economic output. The 2006 Services Directive, designed to further integrate services across the bloc, has been largely ineffective. As political scientist Wojciech Lewandowski points out in a peer-reviewed paper for the Utrecht Law Review, implementation of the directive has been inhibited by its “complex system of exclusions and derogations,” as well as the “fragmented implementation by Member States.” As a result, “The problem of an unfinished eradication of barriers to cross border trade and free flow of services in the single market persists,” Lewandowski adds.
