European Commission presents new strategy for the single market.

On 21 May, the European Commission adopted a new Single Market Strategy. The Communication “The Single Market: our European home market in an uncertain world” aims to help eliminate the ten biggest existing barriers to the Single Market through measures in nine key areas. According to the European Commission, these include the lengthy recognition of professional qualifications, the slow development of standards and norms, restrictions on cross-border work as well as overly complex national and EU regulations.

Measures based on nine pillars

The new strategy is based on nine pillars with the aim of creating a simple, seamless and strong single market. They comprise removing the 10 biggest existing barriers to the single market, promoting services, support for small and medium-sized enterprises, digitalisation, simplification and taking joint responsibility on the part of the EU and member states with a view to implementation and enforcement of existing rules.

High administrative costs of postings

Under the first pillar, the European Commission identifies cumbersome and cost-intensive procedures for the temporary posting of workers as a barrier to the single market. In 2023, 5.5 million postings were reported. The administrative costs for these 5.5 million postings are estimated – excluding the road transport sector – to be between 477 and 635 million euro annually.

Different sectors – different levels of risk

According to the European Commission’s Communication, there is a clear need to protect posted workers in high-risk sectors, such as construction or agriculture. However, administrative burdens for postings in sectors with low risks of social fraud and social dumping could be reduced, such as posting of skilled professionals or managerial staff. The Commission therefore intends to explore measures to facilitate temporary cross-border service provision.

Simplifying social security documentation

The verification of social security coverage for cross-border postings (A1 certificate) is also often time-consuming and administratively burdensome, as it typically requires physical presence and paper documents. This has a discouraging effect on citizens and businesses wishing to exercise their right to free movement. In the future, the European Social Security Pass (ESSPASS) is to enable digital verification. After completion of the current pilot phase, it is due to be rolled out EU-wide. The Commission is also supporting the reform of the regulation on the coordination of social security systems.

Digitalisation as a key enabler

In addition to addressing major barriers in the single market, digitalisation is a central theme of the strategy. The EU needs a paradigm shift from a paper-based to a data-based, digital single market, in which information is exchanged between businesses and public authorities in real time through interoperable, data-driven solutions. The Single Digital Gateway (SDG) already provides cross-border access to information and administrative procedures for citizens and businesses, following the “once-only” principle. In the future, the Once-Only Technical System (OOTS) is expected to allow automated exchange of documents and data between authorities. Moreover, the Internal Market Information System (IMI) will be extended to cover additional areas of cooperation between Member States.

Outlook

The European Commission’s Communication is accompanied by an omnibus package to support small and medium-sized listed companies (Small Mid-Caps) – another step towards simplification and reducing bureaucracy. The European Commission will report on the implementation of the Single Market Strategy in its Annual Single Market and Competitiveness Reports. The key performance indicators used for these reports will be further developed in line with the strategy’s priorities.