Enrico Letta presents report on the future of the single market.

In April, Enrico Letta, the former Italian Prime Minister and current President of the Jaques Delors Institute, presented his Report on the Future of the EU Single Market. Whilst preparing his report, Letta held a total of 400 discussions in 65 cities in both the EU and the EU accession countries since September 2023.

The report notes that there is an inherent tension between the outcomes of a well-functioning single market, which generally increases public and private welfare, and the social agenda, which aims to leave no one behind. Accordingly, the single market is not only an engine for growth and prosperity, but also a potential source of inequality and poverty if its benefits are not widely shared or if it leads to a race to the bottom in social standards. It must therefore be ensured that any further development of the single market includes a genuine social dimension in order to guarantee social justice and cohesion. A strong social dimension in the EU single market promotes inclusive prosperity, ensuring fair opportunities, workers’ rights and social protection for all, whilst contributing to growth.

Expanding the accessibility of labour mobility

The report states that the freedom of movement is the least developed of the four freedoms of the single market and is only accessible to a minority of EU citizens. Against this background, measures are recommended to open up the benefits of labour mobility to a larger number of people. For example, procedures should be simplified by using the potential of digitisation, e.g. when posting workers. Letta proposes merging the two declarations (PDA 1 and posting declaration) that are currently required under EU law for each posting into a single notification.

Furthermore, improving the coordination of social security must become a priority in the EU's political agenda. The full implementation of the Electronic Exchange of Social Security data by all member states must be completed, and the pilot activities for the European Social Security Pass (ESSPASS) should be advanced to introduce digital solutions for verifying people’s social security entitlements in other EU countries. The proposals for introducing a European Social Security Number should be relaunched. Other measures recommended by Letta to increase labour mobility include reducing barriers to occupational mobility, integrating unemployed people into the labour market and improving access to information about workers' rights with regard to social security and mobility.

Avoiding weakening labour and social rights

One of the downsides of free movement is that it can be used to circumvent existing labour standards and regulations in order to increase competitiveness. According to Letta's report, ensuring a level playing field, combating social dumping and mitigating the risk of abuses are key elements of a well-functioning single market. Over the years, the EU has introduced a range of instruments to address these risks, but there is still more to be done. The actions recommended in the report include strengthening the European Labour Authority, improving social security coordination and clarifying the legal framework for the posting of third-country nationals, who are exposed to higher vulnerability to social fraud due to the lack of a link between labour and migration law.

Further development in the area of occupational safety

Special attention should be paid to avoiding a race to the bottom in health and safety at work. Here, the report addresses the important role of the European Agency for Safety and Health at Work (EU-OSHA) and the further development of strategies in this area. According to Letta, issues such as mental health, which includes stress and burnout, and the risks associated with climate change should be addressed in particular. The report emphasises that solid data collection and analysis is needed in order to prevent accidents. This data should be used to develop targeted measures and evidence-based safety strategies.

Next steps

The report was discussed in the context of competitiveness by EU heads of state and government at an extraordinary European Council meeting held on 17 and 18 April. The European Council conclusions call on the current and incoming Council Presidencies to take work on the recommendations therein by the end of the year.