Despite some positive signs, measures aimed at strengthening the European Union’s competitiveness still need time to produce concrete results, concluded the European Commission when it published its new ‘single market and competitiveness’ annual report on Friday 30 January.
This annual report assesses the functioning of the single market and EU competitiveness, and analyses the main drivers of European competitiveness, based on 29 performance indicators.
The report, which comes a year after the ‘Competitiveness Compass’ was presented (see EUROPE 13568/1, 13565/1), shows that, of these 29 criteria, “six indicators have decreased, six have improved, and 15 remain broadly unchanged. Two indicators are new”.
Among the key findings, the report indicates that single market integration has “reached a plateau and most barrier-relevant indicators [on the single market] show limited progress”.
On the other hand, the EU’s efforts to reduce the administrative burden on businesses and administrations are beginning to bear fruit, and the Commission estimates that regulatory simplification initiatives will generate €15 billion in savings by 2025.
However, on another negative note, “expenditure in research and development remains below the 3% of GDP target and is too low to close the innovation gap”. Private investment has fallen, while venture capital investment remains below that of international competitors.
Renewable energies continue to develop, and this is beginning to bring prices down in some regions, but overall, energy prices remain high. “Strategic dependencies remain stubbornly elevated”, notes the European institution.
The Commission also notes that “fragmented national rules continue to make it complex and costly to establish and operate companies across the EU, with no progress to date”.
The perception of ease of regulatory compliance has remained broadly stable in the EU over the past few years, “showing also that establishing a permanent presence in other Member States remains cumbersome, in particular as companies need to assess and comply with the national company law in each Member State”.
EU market surveillance also remains inadequate, says the Commission. “While the number of investigations is slowly increasing, national authorities notify that only 102 parcels are checked per one million inhabitants. In parallel, the exponential surge of e-commerce imports, reaching 4.6 bn small value consignments in 2024, puts pressure on customs and market surveillance authorities, posing a major challenge for checking compliance and safety”.
Another aspect analysed was the freedom to provide services. Despite efforts to remove restrictions, “the level of restrictiveness in services has remained stable in recent years and deserves a new political impetus”, the Commission believes.
The temporary posting of workers, for example, is still too complex for businesses, the report concludes. And lengthy and complex procedures for recognising skills and qualifications can prevent EU citizens from practising their profession in other Member States.
Another negative point: the adoption of digital technologies is progressing, but too slowly. “The share of companies in the EU using artificial intelligence, cloud computing and data analytics grew significantly in 2025, yet more slowly than in competing economies and far from being on track to meet the target of a 75% uptake by 2030”.
For 2026, the Commission promises to continue working on the various barriers to the single market, focusing in particular on payment delays and obstacles in construction and installation services related to the green transition.
Kristalina Georgieva invited to the European Commission’s seminar on 4 February. President of the European Commission Ursula von der Leyen has invited Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva to take part in the next College of Commissioners’ seminar on European competitiveness, the EU institution said in a press release on the same day.
The seminar, to be held on Wednesday 4 February, “will provide an opportunity for an in-depth strategic discussion on strengthening the European Union’s competitive position in a rapidly evolving global context“.
These exchanges will help prepare for the informal EU leaders’ ‘retreat’ on Thursday 12 February.
Link to the report: https://aeur.eu/f/khj (Original version in French by Solenn Paulic)