COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The Single Market: our European home market in an uncertain world A Strategy for making the Single Market simple, seamless and strong
Date: 2025-05-21
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU programme, EU strategy, competitiveness, digital transformation, investment, liberalisation of trade, provision of services, single market, small and medium-sized enterprises, value chain

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 21.5.2025  COM(2025) 500 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The Single Market: our European home market in an uncertain world  A Strategy for making the Single Market simple, seamless and strong  
 
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

The Single Market: our European home market in an uncertain world 

A Strategy for making the Single Market simple, seamless and strong 

The Single Market is our European home market. It is a powerful catalyst for growth, 
prosperity and solidarity. With a GDP of EUR 18 trillion1, the European Market is the second 
largest economy in the world, accounting for almost 18% of the global economy2 and providing 
the EU with scale, strength and agility. Bringing together 30 states3, 450 million consumers 
and 26 million companies4, our European Market offers access to a wide range of products, 
services  and investment  opportunities.  It provides balance:  opportunities  for businesses and 
citizens,  as  well  as  protection  of  workers  and  consumers.  It  also  offers  stability  and  a 
predictable investment and business environment, founded on the rule of law. Our European 
Market embodies the values of the social market economy that unites freedom and prosperity 
for all. 

The Single Market creates prosperity and is the first driver of our competitiveness. It has 
increased EU GDP by at least 3-4%5 and created 3.6 million jobs6, with large positive gains for 
all Member States. Further completing the Single Market would double the already achieved 
gains7. To respond to geopolitical challenges, we must use the full potential of our European 
market  to  increase  productivity  above  its  sluggish  1%  growth  trend8.  Building  on  the 
assessments by Enrico Letta, Mario Draghi and Sauli  Niinistö, we must use it to regain the 
competitiveness9 needed to protect the European social model, support the clean transition10  
as well as secure our strategic sovereignty11 and security12. 

While the world is plunging into a period of economic uncertainty caused by geopolitical 
challenges  and  trade  tensions,  the  European  Market  is  our  anchor  for  stability  and 

1 Eurostat (2024), Gross domestic product at market prices. 
2 IMF, World Economic Outlook, October 2024. 
3 The Single Market comprises the 27 EU Member States and the three EEA EFTA States (Iceland, Liechtenstein, 
and Norway), making a total of 30 participating countries. 
4 Since November 2023, Eurostat’s Structural Business Statistics also includes data on additional NACE sections 
(K,  P,  Q,  R  and  section  S96).  These  additional  NACE  sectors  cover  companies  in  sectors  like  financial  and 
insurance activities, education, human health and social  work activities. With these additional NACE sections 
included, Eurostat counts around 32 million companies in the EU in 2023. Enterprises by detailed NACE Rev. 2 
activity and special aggregates, 2023. Source: Eurostat. 
5 Strathof et al. (2008); Mayer et al. (2018); Mion and Ponattu (2019). 
6 Muller et al. (2017). 
7 Fontagné and Yotov (2025). Under the assumption that 75% of the most successful decrease in bilateral trade 
costs for a given industry materialised for all industries within the Single Market. 
8 The EU labour productivity gap with the US stood at 22% in 2023, measured by purchasing power adjusted 
GDP per hour worked. European Commission: 2025 Annual Single Market and Competitiveness Report. 
9 Report by Enrico Letta: ‘Much more than a market’. 
10 The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation, COM(2025) 85  
11 Report by Mario Draghi: ‘The future of European competitiveness – A competitiveness strategy for Europe’ 
12 Report by Sauli Niinistö:  ‘Safer Together  – Strengthening Europe’s Civilian and Military Preparedness and 
Readiness’. 

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resilience. It allows absorbing shocks and shields EU businesses from global uncertainties and 
market risks. Europeans are each other’s first partners, exchanging European-made products 
and  services  across  Member  States  and  regions.  The  Single  Market  is  critical  to  build 
continental size competitiveness in a world of giants and is vital to deliver on the actions in the 
Competitiveness Compass, the North Star of this Commission13. Removing remaining barriers 
and expanding  the Single Market  enhances market  access,  not  least  for  small  and medium-
sized enterprises (SMEs) and innovative and scaling up companies and ensures more choice at 
cheaper prices. This must be further leveraged. It requires developing our European market by 
reducing barriers preventing the smooth circulation of goods, services, people and capital. It 
also  requires  strengthening  European  value  chains,  business  cases  for  investment  and  lead 
markets and using our available instruments including public procurement. A strong Cohesion 
Policy, alongside an effective Single Market, can guarantee genuine inclusion across the whole 
EU ensuring that everyone can thrive in the place they call home. 

It  is  imperative  that  we  reinvigorate  our  vision  of  a  simple,  fair  and  seamless  Single 
Market. At  the  core  of  this  vision  lies  a  contract  with  businesses  and  citizens:  more  free 
movement within the Single Market, and more protection and empowerment in our European 
Market.  This  requires  concrete  and  speedy  progress  on  major  policy  projects  –  notably  in 
relation  to  capital,  digital,  energy  and  telecommunications  markets  –  and  actionable  policy 
measures that are respected and enforced at European, national and regional level. While this 
has always been the aspiration, it now needs to become a more consistent reality. The current 
global  context  calls  for  the  political  will  to  tackle  remaining  barriers  once  and  for  all:  the 
European, national and regional levels will need to hold themselves and each other to account. 
A new approach is warranted to deliver comprehensively this time. Not by adding an additional 
layer of rules. But rather by adding an additional layer of ambition and commitment by all to 
make them work. It is time to make the European market work, it is time to choose Europe. 

A new method for our European Market 

This Strategy presents a new approach to further developing our European market. It consists 
of the following pillars: 

Fewer barriers: joint and focused efforts to take down the most harmful Single Market 
barriers  -  doubling  down  on  efforts  to  tackle  the  ‘Terrible  Ten’.  Too  many  obstacles 
continue to tie down the Single Market, negatively impacting trade and investment14. All of 
them must and will be addressed. But we need to keep focus. This is why in this Strategy we 
propose to address, as a first priority, the 10 most harmful Single Market barriers. 

More ambition: a new approach to boosting European services markets. In seeking greater 
ambition  and  alignment,  a  novel  approach  to  invigorate  the  European  services  markets  is 
needed.  There  is  a  pressing  need  for  an  enhanced  dynamic  within  the  Single  Market  for 
services, recognising its pivotal role. The proposed sectorial approach will zoom in on specific 
services sectors that could bring the highest economic added value and are relevant for the twin 
transition. It is long overdue.  

More focus: on small and medium-sized enterprises (SMEs) including innovative startups 
and scaleups. SMEs and small mid-caps (SMCs) are among the most affected by regulatory 

13 COM(2025) 30. 
14 European Commission: Annual Single Market and Competitiveness Report, COM(2025) 26. 

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and administrative market fragmentation and stand to gain  the most from a more integrated 
European market. This Strategy puts forward a series of actions enabling SMEs to make the 
most of their European market. It will be complemented by a dedicated start-up and scale-up 
strategy.  

More  effective  digitalisation:  Member  States  and  the  EU  need  to  work  in  sync. 
Digitalisation can boost a joint administration and speed up doing business in the EU. Digital 
tools thus enable the optimal functioning of the Single Market and are crucial for the effective 
and efficient implementation of policies. This goes hand in hand with the European ambition 
for simplification.  

More simplification: taking immediate action to reduce red tape and make things simple. 
The  Omnibus  package  accompanying  this  Strategy  responds  to  businesses’  expectations: 
introducing small mid-caps to tailor regulation to their needs, moving from a document-based 
to a data-based Single Market and providing an emergency solution for products that need to 
access the market. As a general matter, we should aim for simplification leading to lower costs, 
higher  productivity,  and  a  better  functioning  of  the  Single  market,  while  maintaining  our 
ambition on the climate and sustainability, and our social responsibilities. We must have simple 
rules that makes it easy to grow and to do business in the Single market15. The principle of “1 
in, 27 out” should be the guiding principle of our Single Market.  

More effective implementation and enforcement: the well-functioning of our European 
Market is a joint responsibility of the EU and the Member States. It relies on the smart 
implementation and enforcement of agreed policies that requires strong institutions and respect 
for the rule of law. Effective enforcement of agreed rules  remains key. It requires proactive 
action to prevent the creation of new barriers, joint work on the interpretation and application 
of  rules  and  legal  corrective  action  where  needed,  so  as  to  provide  a  stable  operating 
environment  in  which laws apply  effectively  and uniformly, giving  the EU and its Member 
States  a  competitive  edge.  It  also  demands  decisive  enforcement  action,  including  more 
systematic infringement proceedings. 

More  ownership:  increasing  political  and  national  engagement.  We  need  more  national 
ownership and a serious commitment from all actors at all levels of government. Member States 
are encouraged to prevent the introduction of new barriers, inter alia when transposing EU rules 
into national law, and to address regulatory and administrative barriers at regional and national 
level. Assessing  the  compliance  of  draft  national  measures  with  EU  law  and  ensuring  the 
transparency of these measures towards other Member States and stakeholders is key. 

More synergy: paradigm shift in EU spending. At present there is little direct link between 
EU spending (focused on investment) and Member States undertaking regulatory reforms to 
remove  Single  Market  barriers  or  promote  European  business  cases  and  value  chains.  The 
potential to use the EU budget as a springboard to promote national reforms that advance Single 
Market policy objectives is significant. It could promote the implementation of the EU acquis 
more  intensely  than  is  the  case  today,  for  instance  by  supporting  investments  to  tackle 
administrative  obstacles  including  through  support  focused  on  EU  businesses,  jobs  and 
components. 

15 Simpler and Faster Europe: Communication on Implementation and Simplification, COM(2025) 47.   

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More  protection:  acting  as  a  shield  from  unfair  trade  practices. The  size  of  the  Single 
Market,  its  shock-absorption  capacities,  and  its  high  social,  environmental,  and  consumer 
standards protect EU citizens and businesses in the face of growing international uncertainties. 
Ensuring a high level of consumer protection is essential for a well-functioning Single Market, 
and is needed to ensure consumer trust, legal certainty and a level-playing field for businesses. 
In this context, the European market, protected by the effective use of trade defence instruments 
where necessary, offers a source of stabilization and resilience that can shield EU businesses 
from  trade  disruptions  and  reduce  external  dependencies,  particularly  when  supported  by 
policies encouraging domestic consumption and investment.  

Chapter 1. Removing barriers: Doubling down on the ‘Terrible Ten’  

On the basis of comprehensive consultations of stakeholders16, the Commission has identified 
a set of ‘Terrible Ten’ Single Market barriers that it will address as a first priority with this 
Strategy. Often, these barriers are an unintended  consequence of legitimate policy concerns. 
Tackling the barriers therefore does not put into question the Single Market’s commitment to 
high social and environmental standards protecting citizens and workers. 

1. Overly complex EU rules 

EU policies and legislation play an important role in establishing the Single Market and 
ensuring its attractiveness for businesses, investors and consumers alike. Very often, the 
Single Market is made through having a single set of rules where one EU-wide rule replaces 
27 national ones. But at times, the EU acquis can become complex and overlapping, resulting 
in  high  compliance  costs  or  other  avoidable  administrative  burden.  To  address  this,  the 
Commission  is  stress  testing  the  entire  EU  acquis,  in  close  consultation  with  concerned 
stakeholders. As a result, we are proposing a series of simplification Omnibus packages, one 
of which is being  adopted in parallel to this Strategy. This fourth omnibus package will lift 
burden for EU businesses by extending exceptions applicable to SMEs to small midcaps, by 
removing obligations to provide product compliance documentation in paper format, by giving 
businesses the choice to provide instructions of use digitally and by providing a solution for 
products that cannot get to the market because of lack of standards. Further Omnibus proposals 
will follow, including a Digital omnibus aimed at simplifying the single market legislation also 
in the digital sphere and an environmental omnibus to facilitate compliance in particular with 
Extended  Producer  Responsibility  (EPR)  obligations  in  ways  that  do  not  raise  new  market 
barriers. The Competitiveness Check as core part of impact assessment will also ensure that no 
new barriers are created with new EU legislation, complementing the removal of barriers at 
national level, as a functioning Single Market is key to strengthen our competitiveness.  

A  proliferation  and  multitude  of  regulators  and  agencies  can  add  to  heterogenous 
requirements  and  complex  procedures.  Improving  coherence  and  alignment  across 
authorities and Member States would support a more effective and less cumbersome oversight 
of market actors and application of relevant rules17. 

16 Synopsis report on the Single Market Strategy consultation activities.  
17 Report by Mario Draghi: ‘The future of European competitiveness – A competitiveness strategy for Europe’. 

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Future legislative initiatives, both new and revisions of existing EU legislation, will strive 
to provide simpler rules. One example are the EU public procurement rules that are designed 
to promote transparency and cross-border sourcing of works, products and services. However, 
the complexity and fragmentation of some of these rules discourage public buyers from using 
the full toolbox and businesses from participating in tenders cross-border, and do not allow to 
capitalize on the strategic investment opportunity of public contracts. 

Providing straightforward, harmonised rules is particularly important in key strategic 
sectors,  such  as  defence.  Given  the  geopolitical  circumstances,  there  is  an  urgent  need  to 
simplify  and  coordinate  existing  rules  and  procedures  to  address  the  fragmentation  of  the 
European defence market, facilitate the required  investments  and  boost  the readiness of the 
European defence industry over the long run. To achieve this, as laid out in the White Paper for 
European  Defence  Readiness  2030,  Member  States  need  to  massively  invest  in  defence 
capabilities  and  procure  defence  systems  to  close  critical  capability  gaps.  The  EU  defence 
market  is  characterised  by  a  lack  of  economies  of  scale,  national  players  often  catering 
primarily to their domestic markets, long-term underinvestment, inefficiencies and reliance on 
non-EU suppliers18. Achieving a fully functioning EU-wide defence equipment market– where 
Member States trust procurements, sub-contracts, and purchases from other Member States as 
they do their own –would guarantee access to defence products, components, and spare parts, 
ensuring the security of supply in times of crisis. This will contribute to enhanced European 
security, defence capabilities and autonomy. In addition, joint and cross-border procurement is 
required  to  create  lead  markets.  The  revision  process  of  the  EU  directive  on  defence  and 
sensitive security procurement scheduled for 2026 will take into account the Competitiveness 
Compass recommendation to introduce a European preference which can only be established 
in a functioning EU-wide market for defence equipment allowing a level playing field and fair 
competition among EU companies. 

In the construction sector, the lack of harmonised non-price criteria in EU public procurement creates 
uncertainty and significant administrative burden for companies wishing to participate in tenders in 
several countries. While some Member States introduced requirements to reduce carbon emissions 
for  key  materials  such  as  steel  and  cement,  other  countries  have  limited  themselves  to  voluntary 
recommendations, without or with differing specific targets. This inconsistency makes it difficult for 
businesses, especially SMEs offering low-carbon products, to navigate tendering procedures and take 
advantage of opportunities in different markets. 

Actions: 

•  Adopt  simplification  omnibus  packages  to  reduce  unnecessary  burden  to  safeguard 
effective  implementation  of  policy  objectives  such  as  the  Digital  Omnibus  aimed  at 
streamlining and simplifying certain elements of the EU digital acquis and the Omnibus 
to ease compliance with Extended Producer Responsibility obligations (ongoing) 
•  Competitiveness Checks during the impact assessment phase to ensure Single Market 

consistency and further innovation (ongoing) 

•  Review of national and European agencies in the field of the Single Market with a view 

to effective application of the law (Q1 2026) 

18 As outlined in the Joint White Paper for European Defence Readiness 2030, JOIN(2025) 120, the first step will 
be an Omnibus proposal by June 2025. 

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•  Revise the Public Procurement framework to centralise and streamline its fragmented 
and complex provisions, and to mainstream the use of sustainability, resilience, social 
and, in certain technologies and strategic sectors, European preference criteria in EU 
public procurement while ensuring competitive tenders (2026) 
In  coordination  with  the  revision  of  the  Public  Procurement  framework,  revise  the 
Directive on defence and sensitive security procurements19 to simplify and harmonise 
rules  and  procedures  for  defence  procurements  and  to  take  into  account  a  possible 
European preference (2026) 

• 

2. Lack of Single Market ownership by Member States 

EU  businesses  and  citizens  constantly  report  national  rules  that  disproportionately 
restrict fundamental freedoms guaranteed by the Treaties or create economically harmful 
barriers  in  the  Single  Market.  National  rules  often  do  not  take  enough  account  of  EU 
principles and legal frameworks. Member States also create barriers and fragment the Single 
Market  by  lack  of  transposition,  incorrect,  unnecessarily  divergent  or  burdensome 
implementation of EU law (gold-plating). 

More than ever, joint ownership and giving political priority to the Single Market and 
enforcement of its rules is key. The Commission thus calls on Member States to name a high-
level Single Market Sherpa in their prime minister’s or president’s office with authority towards 
all parts of the government. The Sherpa should promote application of Single Market rules and 
have an active role in preventing and addressing national regulatory and administrative Single 
Market barriers. The Sherpas should also cooperate with each other on accelerating the removal 
of barriers across the Single Market. To facilitate the cooperation, the Commission’s Executive 
Vice-President in charge of the Single Market or their representative will call on the high-level 
Single Market Sherpas to meet on a regular basis. 

Political reinforcement is also needed to further empower the Single Market Enforcement 
Taskforce (SMET)20. An annual high-level political meeting bringing together Member States’ 
ministers  responsible  for  the  Single  Market,  high-level  Single  Market  Sherpas  and  the 
Commission’s Executive Vice-President in charge of the Single Market will provide strategic 
steer  for  SMET’s  work  and  political  support  for  the  implementation  of  jointly  identified 
solutions to address barriers21.  

Nobody can prevent the creation of new barriers in the Single Market more effectively 
than Member States. Ensuring compliance of national regulation with Single Market rules 
already at inception stage and creating the conditions for citizens and businesses to fully reap 
the benefits of the Single Market is the responsibility of the Member States. The Single Market 
is more important than ever, and so are the thorough assessments of proportionality of all draft 

19 Directive 2009/81/EC. 
20 SMET brings together the Member States’ services and the Commission and focuses on elimination of concrete 
barriers hampering Single Market freedoms of citizens, EU businesses and self-employed, who aim to benefit 
from the Single Market. For more information on SMET, see Chapter 5. Enforcing respect of Single Market rules 
and the SMET dedicated website.  
21  For  instance,  so  far  SMET  members  have  not  been  able  to  convince  their  colleagues  from  the  responsible 
institutions to introduce a sufficient number of good practices aiming to make it easier for all businesses to open 
a bank account in their Member State. Currently, out of 5 best practices per Member State, overall 40% has been 
implemented, 22% is being considered and 24% will not be considered (no information on 13%). A high-level 
political meeting should increase the uptake of the proposed solutions.  

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national rules and better use of notification mechanisms at EU level22. Yet, between 2022 and 
2024,  about  15%  of  notifications  of  national  rules  or  their  drafts  raised  the  Commission’s 
concerns as potentially creating barriers or fragmenting the Single Market and led to dialogues 
between the Commission and the Member States concerned23. Member States are invited to 
work  with  the  Commission  to  ensure  that  the  existing  mechanisms  are  used  to  their  full 
potential and that robust proportionality assessment of draft national measures is performed to 
allow  the  Commission,  other  Member  States,  and  stakeholders,  to  engage  in  an  effective 
exchange  upstream  in  order  to  avoid  that  a  disproportionate  new  barrier  materialises.  In 
addition, the Commission will assess whether the areas so far not covered by the notification 
obligation  have  been  subject  to  more  fragmentation  of  the  Single  Market  and  whether  the 
absence of notification obligations significantly impedes the smooth functioning of the Single 
Market. At the end of 2026, the Commission will take stock of the situation, and on that basis, 
it will decide whether to propose legislative measures to close gaps and reinforce prevention 
governance.  

The Commission will also introduce a Single Market dimension to the Rule of Law Report and 
is  working  with  Member  States  and  stakeholders  to  address  rule  of  law  issues  affecting 
companies, especially SMEs, operating across borders. 

A Member State imposes a certification scheme on entrepreneurs wishing to install renewable energy 
equipment or improve the energy efficiency of buildings in order for the recipients of those services 
to  receive  public  financial  support.  Over  the  past  years  the  various  public  aid  measures  for  the 
renovation of buildings and installation of renewable energy equipment have been put in place often 
requiring an intervention of an entrepreneur with this specific certificate. It thus became a condition 
to access a substantial part of the building renovation market in that Member State. The certification 
scheme contains several conditions which go beyond those harmonised in the Renewable Energy 
Directive and create extensive access problems for companies not established in that Member State.  

Actions: 

•  Call a first meeting of the high-level Single Market Sherpas (Q4 2025)   
•  Organise a first SMET annual high-level political meeting (Q4 2025) 
•  Propose a Single Market Barriers Prevention Act (Q3 2027, if necessary, based on the 

assessment of the functioning of existing preventive tools) 

3. Complicated business establishment and operations  

The setting up and operation of companies across the EU remains complex and costly due 
to the fragmentation of legal rules across Member States. Businesses, in particular start-
ups, point to the fragmentation of rules across the EU and stress that procedures for setting up 
and investing into companies are not sufficiently digital, easy and quick, blocking companies 
from successfully scaling-up in the EU. A promising avenue, strongly encouraged in both the 
Letta report and the Draghi report, would be to set up a 28th regime24 geared for businesses to 
operate across the Single Market: this would allow for ambition and innovation. The European-
level 28th regime will provide a single set of rules, potentially in a progressive and modular 

22 See more on preventive tools in Chapter 5. Enforcing respect of Single Market rules. 
23  Based  on  the  Commission’s  statistics  concerning notifications  under  Single  Market  Transparency  Directive 
(Directive (EU) 2015/1535) and Services Directive (Directive 2006/123/EC). 
24 A Competitiveness Compass for the EU, COM(2025) 30. 

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way. It would include an EU corporate legal framework, based on digital by default solutions, 
and will help companies overcome barriers when setting up and operating across the Single 
Market. To do so, it will simplify applicable rules and reduce the cost of failure by addressing 
specific aspects within relevant areas of law, including insolvency, labour and tax law. It will 
explore  the  possibility  of  enabling  companies  to  establish  in  Europe  more  rapidly,  ideally 
within 48 hours, aligning with Enrico Letta’s vision for a ’European Code of Business Law’. 

The transfer of businesses to a new generation of entrepreneurs creates opportunities and 
preserves jobs. Business transfers – handing over a business to a new owner, often with new 
management – can be complex and must comply with the specific regulations of each Member 
State. The volume of business transfers in Europe is increasing, but the framework for business 
transfers does not sufficiently address existing challenges25. 

A company with a growing business decides to establish a permanent presence in three other Member 
States to attract local clients. To do that, the company must first assess and understand the national 
company law  in  each Member  State, adopt a  different  national legal  form  for each  company  and 
adapt the organisational structure of each company to meet the national requirements. If the language 
barrier and the differences in the legal system of the Member State are significant, the company may 
need  to  engage  an  external  consultant  or  a  lawyer,  leading  to  significant  delays,  costs  and 
administrative burden, particularly for an SME. 

Actions: 

•  Establish common rules to facilitate the digital setup of businesses and their operations 

across the Single Market (Legislative proposal on ‘28th regime’ - Q1 2026) 
•  Revise the Commission Recommendation on business transfers26 (Q4 2025) 

4. Recognition of professional qualifications 

The Single Market provides a unique framework for the circulation of people with their 
skills and qualifications. The faster professional qualifications are recognised, the easier it is 
for citizens to work in other Member States and for services providers to operate cross-border. 
EU law provides for the mutual recognition by Member States of professional qualifications 
obtained in another EU country that are required to permanently exercise regulated services. 
To remain competitive globally, the EU needs to strengthen its capacity to attract and retain 
talent  that  can  help  fill  the  skills  shortages  in  the  labour  market.  However,  third-country 
nationals  continue  to  face  important  barriers  to  work  in  the  professions  in  which  they  are 
qualified.  

Lengthy and complex recognition procedures prevent EU citizens from exercising their 
profession  in  other  Member  States.  This  can  push  them  into  lower  qualified  roles  and 
exacerbate the labour market effect of the current demographic trends. Digital processes have 
the potential to speed up recognition procedures that are too often still paper-based. According 
to a recent report by the European Court of Auditors, only two Member States provided for 

25 Assessment of framework conditions for business transfers in Member States, The network of SME Envoys,  
https://ec.europa.eu/docsroom/documents/60694 
26 94/1069/EC: Commission Recommendation of 7 December 1994 on the transfer of small and medium-sized 
enterprises. 

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fully electronic recognition procedures or use of email without requesting additional physical 
documents27. 

Automatic  recognition  procedures  allow  for  faster  and  more  efficient  recognition  of 
professional qualifications, but are limited in scope to only a few professions, notably in 
health services. Extending the scope of automatic recognition procedures through instruments, 
such as the existing Common Training Frameworks, can make the recognition of professional 
qualifications faster and more effective. The Union of Skills28 announced a Skills Portability 
Initiative to address barriers to worker mobility. 

A specialised engineering company failed to hire a highly qualified technician from another Member 
State across the border due to the lengthy recognition procedures and request for certified translations 
of a series of documents confirming qualifications obtained in the technician’s home country. 

Actions: 

•  Explore EU legislation to address barriers to the mobility of workers. 
•  Make the procedures for the recognition of professional qualifications faster and more 

efficient through the greater use of digital tools (Q4 2026) 

•  Facilitate  the  recognition  of  professional  qualifications  by  extending  automatic 

recognition schemes, for instance via Common Training Frameworks (Q4 2026) 

•  Explore EU legislation to establish common rules for the recognition and validation of 

qualifications and skills of third country nationals (Q4 2026) 

5. Long delays in standard-setting that weigh on innovation and competitiveness  

Standards29 are the embodiment of innovation and are at the core of a resilient, green and 
digital Single Market. They provide legal certainty, facilitate access to new technologies and 
boost the global competitiveness of EU businesses. However, our standardisation framework 
struggles to meet market and policy needs, in particular on timeliness, inclusiveness and access 
to standards. Businesses are faced with the absence or late availability of harmonised standards, 
generating  costs  and  uncertainty,  hampering  their  competitiveness  and  slowing  down  the 
uptake of new technologies in the Single Market. The Commission will seek to make the EU 
framework for harmonised standards futureproof by reviewing the Standardisation Regulation. 
This will enhance the speed and flexibility of the standardisation process, ensure a stakeholder-
driven process with balanced stakeholder participation, in particular for startups, SMEs, civil 
society and academia, improve access to standards and reinforce the EU's role as  the global 
standard-setter. It will also contribute to the effective functioning of the EU product legislation 
framework, which is at the heart of the Single Market. Connecting standardisation closely with 
the Union’s research and innovation efforts, including the basic units of measurement set by 
the metrology initiative, serves the free circulation of services and products. 

27 European Court of Auditors: ‘The Recognition of Professional Qualifications’; Special Report 10/2024. 
28 COM(2025) 90. 
29 i.e. harmonised standards and other European standards supporting EU law. 

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In  the  meantime,  the  Omnibus  package  adopted  together  with  this  Strategy  will  allow  the 
Commission, in cases where the current standardisation system does not deliver, to lay down 
common specifications which businesses can use to prove compliance with legal requirements. 

A business develops state-of-the-art unmanned aircraft systems which since 2023 have to comply 
with legal requirements on their design, production, maintenance and operation. The Commission 
has requested the European standardisation organisations to develop harmonised standards to help 
businesses implement these requirements. However, only one has been developed so far while seven 
are still pending. In the absence of these standards, the business has had to conduct a more costly 
conformity assessment, generating legal uncertainty and administrative burden. These costs could 
have been otherwise invested in innovation. 

Actions: 

•  Allow  the  Commission  to  establish  common  specifications  when  needed  (Omnibus 

proposal adopted together with the Strategy) 

•  Review the Standardisation Regulation (Legislative proposal - Q2 2026) 

6. Fragmented rules on packaging, labelling and waste 

Product labels provide important information for consumers on safety, sustainability and 
nutrition.  Yet,  divergent  national requirements linked to  labelling  make it  difficult to  trade 
across the Single Market. The different requirements are forcing producers to develop different 
versions of the product for different markets or to relabel or even repackage products when 
moving  them  across  borders.  The  proliferation  of  labelling  requirements  also  increases  the 
complexity of information provided to consumers. 

Rules on labelling must balance the need to be clearly understood by consumers with the 
need to reduce market barriers and burden for industry. Several initiatives will pursue this 
balance.  The  new  Packaging  and  Packaging  Waste  Regulation  provides  for  the  creation  of 
harmonised  packaging  labelling  for  consumer  sorting  which  will  be  specified  through 
implementing acts. The Commission will review the Textile Labelling Regulation with a view 
to clarify applicable rules, remove fragmentation and enable a green premium through fully 
harmonised and comprehensive labelling content in a physical and digital label. In the longer 
term, digital labelling relying on a data carrier such as a QR code is the solution for simplifying 
access  to  labels  for  consumers and for easing  compliance for  economic  operators,  although 
essential information such as safety instructions should still be printed on the product. Digital 
labels will form part of the Digital Product Passport (DPP)30 as the digital container for product-
related information, as already envisaged for example under the new Construction Products 
Regulation. 

We need to create a Single Market for waste. The primary purpose of Extended Producer 
Responsibility  (EPR)  schemes  is  to  require  producers  to  cover  the  end-of-life  management 
costs of their products and hence to contribute to recycling and circularity. However, certain 
features  of  EPR  schemes  have  become  one  of  the  barriers  most  frequently  reported  by 
companies operating cross-border in the EU. While EPR schemes are often derived from EU 

30 The DPP was first introduced by the Ecodesign for Sustainable Products Regulation (ESPR). It will serve as a 
digital information carrier and will be accessed using a QR code placed on a product, eliminating the need for 
voluminous  paper  documentation.  Its  technical  implementation  is  ongoing  and  it  is  expected  to  become 
operational for first product categories in 2026. See more information in the chapter on digitalisation. 

10 

 
 
 
legislation, lack of uniformity of principles and requirements has led to a large diversity of EPR 
schemes set up in Member States, regulatory complexity and high administrative burden for 
companies. Particularly for SMEs, national registration and reporting requirements, including 
the obligation to appoint authorised representatives separately for every Member State where 
the producer places products on the market, are a real hurdle to going European. In addition, a 
limited  development  of  EU-wide  end-of-waste  criteria  and  by-product  status,  which  set  the 
conditions  under  which  substances  or  objects  cease  to  be  waste  and  can  be  considered  as 
products, has led to the fragmentation of the Single Market for waste, secondary materials and 
by-products. National or regional end-of-waste criteria have been adopted by Member States 
in an uncoordinated manner and are not easily recognised between Member States. The cross-
border  shipment  of  waste  feedstocks  to  recycling  facilities  and  of  secondary  raw  materials 
within the EU needs to be further eased and accelerated by addressing this fragmentation. A 
lack of harmonised EU  definition of by-products  also  impedes  the circularity of production 
processes. 

To  sell  lighting  equipment  across  the  EU,  a  company  needs  to  comply  with  extended  producer 
responsibility  obligations  in  three  categories  simultaneously:  packaging,  electronic  and  electrical 
equipment,  and  batteries.  To  sell  in  three  large  Member  States,  the  company  needs  to  obtain  16 
different registrations for EPR schemes, interacting with 10 different authorities, following lengthy 
separate  processes  with  distinct  requirements  and  paying  separate  administration  and  registration 
fees.  Once  registered,  different  reporting  obligations  and  frequencies  apply  in  the  case  of  each 
scheme. 

Actions: 

•  Harmonise  labelling  rules  via  sectoral  legislation  and  facilitate  rollout  of  digital 
labelling solutions via the Digital Product Passport (DPP) (progressive introduction of 
DPP, including  possible inclusion  via the New Legislative  Framework review  in  Q2 
2026) 

•  Remove  unjustified  authorised  representative  requirements  from  EPR  schemes  and 
reduce  reporting  obligations,  including  by  limiting  them  to  an  annual  frequency 
(Omnibus proposal Q4 2025) 

•  Address  the  fragmentation  created  by  heterogenous  national  EPR  schemes  through 
further harmonisation, simplification and digitalisation, including through a digital one-
stop shop for information, registration and reporting (as part of the legislative proposal 
for a Circular Economy Act31 - Q4 2026) 

•  Reform end-of-waste and by-product criteria and provide a more harmonised, leaner 
framework in the Single Market for reaching end-of-waste and by-product status. Ease 
the adoption of EU-wide end-of-waste criteria and enable the adoption of such criteria 
for priority waste feedstocks. Facilitate cross-border shipments of waste feedstocks for 
recycling (as part of the legislative proposal for a Circular Economy Act - Q4 2026).  

7. Outdated harmonised product rules and lack of product compliance 

The  EU  product  legislation  framework  is  a  major  asset  of  the  Single  Market  where 
harmonised rules allow placing a wide range of products on the market while protecting 

31  The  preparation  of  the  Circular  Economy  Act  will  be  supported  by  the  discussions  in  the  Clean  Industrial 
Dialogue on Circularity with a dedicated focus on the Single Market. 

11 

 
 
 
the consumer. It is based on (i) principles-based harmonised product legislation (the so-called 
New Legislative Framework; NLF)32, combined with (ii) a system of standards that facilitates 
demonstration of conformity and supports innovation, and (iii) a market surveillance system 
ensuring compliance and consumer protection. These policy pillars frame a level playing field 
with robust competition which prepares the ground for long-term European competitiveness. 
It  also  sets  the  structure  for  policy  initiatives  such  as  digitalisation  and  green  transitioning. 
While  this  framework  has  proven  successful,  it  needs  improvement33.  First,  guaranteeing  a 
coordinated and effective EU-wide response to products bearing a risk necessitates streamlined 
safeguard  procedures,  ensuring  a  rapid  enforcement  action  across  the  Union  once  risks  are 
identified in any Member State. There is a need to introduce clear and precise requirements 
and timely procedures for notified conformity assessment bodies to better address inadequate 
practices. Second, the NLF currently does not outline the responsibilities of economic operators 
involved  in  product  circularity.  Such  a  clarification  would  facilitate  compliance  and  extend 
product lifecycle. Finally, the EU product legislation needs to fully embrace digital solutions. 
The current reliance on traditional paper-based documentation is outdated. In the future, the 
Digital Product Passport (DPP) will allow access to all essential documents required under the 
EU product legislation. 

While the product framework facilitates the seamless circulation of products within the 
Single Market, it needs to be protected from abuse. The sheer volume of products entering 
the European Market from the outside world makes it impossible to ensure full compliance via 
customs and market surveillance checks. Customs authorities, the first line of defence at the 
border, are overwhelmed – particularly by e-commerce imports, which represent 97% of all 
customs  declarations34.  The  market  surveillance  system35,  the  second  line  of  defence,  also 
falling under the competence of the Member States, is similarly under immense pressure36. The 
exploding volume of products entering from third countries that are unsafe, counterfeit or non-
compliant can lead to serious safety and health risks for consumers, has a negative impact on 
the environment and puts legitimate businesses at a disadvantage. Consumers themselves cite 
untrustworthy online sellers as one of the most impactful challenges they face online. In some 
sectors, studies show that up to 100%37 of products on certain e-commerce platforms are non-
compliant. The current market surveillance system lacks the resources and expertise and is too 
structurally fragmented to effectively tackle these challenges. 

32 The NLF is based on two key legal acts from 2008: Decision No 768/2008/EC, which outlines a model for EU 
product  legislation,  and  Regulation  (EC)  No  765/2008,  complemented  and  partially  replaced  by  the  Market 
Surveillance Regulation in 2019. Regulation (EC) No 765/2008 establishes a rulebook for accreditation and CE 
mark. The 29 pieces of legislation that are aligned with this model regulate diverse product categories, such as 
toys, explosives, medical devices, measuring instruments, fertilisers, marine equipment, drones, and batteries. The 
NLF underpins approximately 80% of industrial production and 74% of intra-EU manufacturing. 
33 Evaluation of NLF, SWD(2022) 364. 
34  Commission  Communication  on  A  comprehensive  EU  toolbox  for  safe  and  sustainable  e-commerce, 
COM(2025) 37.  
35  The  system  is  governed  by  the  Market  Surveillance  Regulation  (EU)  2019/1020.  Market  surveillance 
authorities,  in  cooperation  with  customs  authorities,  are  responsible  for  checking  products  and  enforcing 
compliance  in  every  EU  Member  State.  Authorities  collaborate  through  SafetyGate  (for  dangerous  non-food 
products) and ICSMS (for market surveillance of non-food products) to detect and remove unsafe products. 
36 According to EU surveillance data, 4.6 billion of low value consignments (up to EUR 150) were imported into 
the EU in 2024. This is almost twice the number recorded in 2023 (2.4 billion), and more than triple compared to 
2022 (1.4 billion). 
37 BEUC. Under the Microscope: Tests of Temu Products by Consumer Groups, 2025. 

12 

 
 
 
The ability to pool resources, exchange intelligence, and prioritise is key to targeting the 
most harmful products. The pending Customs reform seeks to address these challenges in the 
first line through a new Customs Authority, an EU Customs Data Hub and adjusted rules for 
imported e-commerce parcels to ensure a level-playing field, notably by removing the EUR 
150 duty exemption for imports. Discussions on a possible customs handling fee are also on-
going to address the scaling costs of supervising the compliance of small consignments with 
EU rules. In the same vein, there is a need for EU-level governance of market surveillance, to 
provide systematic coordination and guidance, scale up and pool the capacity and expertise of 
all market surveillance authorities across the EU. In particular, we should consider EU-level 
market surveillance in strategic priority areas, notably concerning e-commerce imports from 
third countries, where measures taken by individual Member States may not be sufficient. 

Among the products listed on a well-known large e-commerce platform during a check by a consumer 
organisation, nearly all the products tested in categories such as helmets, cosmetics, toys and gadgets, 
candles and sponges, electrical and connected products either were dangerous, did not provide the 
required  information  such  as  safety  instructions  or  lists  of  ingredients,  and/or  contained  wrong 
claims. 

Actions: 

•  Take  effective  action  to  increase  product  compliance  by  tapping  into  synergies  with 
capacities  of  the  EU  and  national  customs  and  market  surveillance  authorities  and 
potentially establishing an EU Market Surveillance Authority (as of Q3 2025) 

•  Modernise product legislation framework to harness digitalisation, promote circularity 
and  strengthen  safeguards  (Review  of  the  New  Legislative  Framework  –  possible 
legislative proposal Q2 2026) 

8. Restrictive and diverging national services regulation 

High regulatory and administrative restrictions cement long-standing market structures 
and  stifle  innovation,  scale-up  and  business  opportunities.  The  Services  Directive  has 
contributed  to  a  reduction  of  barriers38,  yet  Member  States’  regulations  continue  to  restrict 
access to around 5700 services activities covering approximately 22% of the EU workforce39. 
Regulating  access  to  a  service  activity  can  be  justified  to  meet  legitimate  general  interest 
objectives such as public health and safety. However, the high number and the type of services 
regulated, as well as the fact that some services are regulated only in one or a few Member 
States, confirms a clear potential for Member States to reduce regulatory burden to facilitate 
cross-border trade and investment. A 10% reduction of barriers to services trade would increase 
EU gross value added by 0.5%40 and greenfield FDI projects by 4 to 21%41. 

Differences in national authorisation and certification requirements make it difficult to 
provide  services  in  other  Member  States.  National  conditions  for  authorisations  and 
certification requirements, even when they are based on Union law, vary widely, making the 

38  European  Commission  (2021),  Mapping  and  assessment  of  legal  and  administrative  barriers  in  the  services 
sector.  
39 European Commission: Regulated Professions Database. 
40 IFO Institute: Building a Stronger Single Market: Potential for Deeper Integration of the Services Sector within 
the EU; Econpol Policy Report 52/2024. 
41  Jungmittag,  A.,  &  Marschinski,  R.  (2023).  Service  trade  restrictiveness  and  foreign  direct  investment—
Evidence from greenfield FDI in business services. The World Economy, 46(6), 1711-1758. 

13 

 
 
 
mutual  recognition  of  authorisations  or  certifications  difficult  in  practice.  Aligning  the 
underlying  conditions  for  those  requirements  that  are  based  on  Union  law  would  reduce 
regulatory fragmentation and make it easier for a service provider authorised in one Member 
State  to  offer  their  services  in  other  Member  States  without  the  need  to  obtain  again  an 
authorisation or certification in those Member States. 

Obligations for companies and entrepreneurs to establish in a Member State other than 
their own are bureaucratic and costly. Member States should not oblige EU service providers 
to establish on their territory as they may provide services cross-border on a temporary basis. 
Yet Member States restrict this possibility at times, in practice treating services providers as if 
they were established on their territory. Businesses need legal certainty on their right to provide 
temporary cross-border services without having to establish in other Member States. 

A  Member  State  refuses  temporary  service  provision  by  a  veterinary  surgeon  established  in  a 
neighbouring country which means that this veterinary surgeon cannot treat animals in farms close 
to his establishment just because these farms are located on the other side of the border. 

Actions: 

•  Launch  an  initiative  to  facilitate  the  provision  of  pan-EU  services  by  providers 
authorised  or  certified  in  one  Member  State  on  the  basis  of  EU  law,  potentially 
including the harmonisation of such authorisation and certification schemes (Q2 2026) 
•  Develop legal guidance and recommendations to Member States to provide clarity on 

the right to provide services cross-border on a temporary basis (Q2 2026) 

9. Burdensome procedures for temporary posting of workers 

Providing services cross-border often entails the mobility of entrepreneurs and their staff. 
The temporary posting of workers is an integral part of the freedom to provide services in the 
Single Market. In 2023, cross-border workers and postings increased  to  1.8 million and 5.5 
million, respectively. EU legislation is designed to protect the rights of posted workers while 
facilitating the freedom to provide services and promoting fair competition. There is a clear 
need to protect posted workers in risk sectors, such as in construction services or the agriculture 
sector.  To support the protection of posted workers, EU law allows Member States to impose 
administrative obligations such as obligations to declare posted workers, where justified and 
proportionate. However, not all posted workers (e.g. skilled specialists such as engineers and 
technicians installing and maintaining machines or management staff) face the same risks. 

The diversity of national declaration requirements, both in nature (paper or digital) and 
content (nature and number of data points) has contributed to complexity for business 
and posted workers alike and fragmented the Single Market. Stakeholders regularly raise 
the  complexity  of  posting  rules  as  a  barrier  to  provide  cross-border  services42.  The 
administrative cost incurred by the complexity of posting provisions for postings (excluding 
road  transport  sector)  is  estimated  at  EUR  477-635  million  per  year43.  In  order  to  reduce 
administrative  burden  on  service  providers,  the  Commission  adopted  a  proposal  for  a 
Regulation  in  November  2024  on  a  public  interface  connected  to  the  Internal  Market 
Information System for the declaration of posting of workers. The public interface would also 

42 Synopsis report on the Single Market Strategy consultation activities.  
43 SWD(2024) 258. 

14 

 
 
 
facilitate  effective  monitoring  of  compliance  with  EU  legislation  aimed  at  ensuring  posted 
workers’ rights and support administrative cooperation between Member States. The European 
Parliament  and  EU  Council  are  encouraged  to  conclude  negotiations  on  the  Commission 
proposal  that  would  represent  a  step  towards  less  and  more  harmonised  administrative 
requirements for posting. This simplification initiative is accompanied by efforts to strengthen 
enforcement of legislation. 

The European Labour Authority supports Member States and social partners in applying 
posting rules by coordinating and supporting concerted and joint inspections, providing 
information  and  employment  support  for  workers  and  businesses,  assist  in  tackling 
undeclared work, mediating cross-border disputes and facilitate solutions. The ongoing 
ELA evaluation points to room for improvement as regards the performance of the agency but 
notes  certain  limitations  in  the  mandate  that  could  affect  ELA’s  potential.  Targeted 
modifications  could  strengthen  ELA,  including  its  efficiency  and  effectiveness,  such  as 
enhanced  data  handling  competencies  and  improved  cooperation  with  Member  States  and 
social  partners,  including  the  information  provision,  ELA’s  role  vis-à-vis  third-  country 
nationals who are EU residents. 

In addition, the Single Market Enforcement Taskforce (SMET) identified smart posting 
policies through which some Member States focus declarations and other administrative 
requirements  on  risk  sectors  and  exempt  very  short-duration  postings  from  these 
requirements44. 

Workers  temporarily  posted  to  another  Member  State  are  subject  to  social  security 
coverage in their country of employment. Posted workers need to show proof of contribution 
to the social security system of their home country (portable document A1). The procedures to 
prove  and  verify  social  security  entitlements  can  be  time  consuming  and  administratively 
burdensome, due to their reliance on physical presence and physical documents. The revision 
of social security coordination Regulations currently under negotiation by co-legislators should 
lead to a simplification of procedures and co-legislators are encouraged to conclude the long-
running  negotiations.  Exchanges  between  social  security  institutions  have  already  been 
facilitated  due  to  the  electronic  exchange  of  social  security  information  (EESSI)  system. 
Building on the recent digitalisation of the application procedure for portable document A1 as 
part of the Single Digital Gateway, the European Social Security Pass (ESSPASS) could bring 
a  further  simplification  by  offering  the  digital  verification  of  social  security  attestations, 
including the portable document A1, also reducing the risk of error and fraud. 

A  medium-sized  engineering  company,  active  in  automation  technology,  installs,  maintains  and 
repairs its machinery across the EU, requiring it to make 3,500 declarations for postings a year. Its 
posted workers are highly skilled and well-paid engineers and technicians that are only posted for a 
few days at a time. The burdensome procedures, especially in light of the large variety of national 
declaration  requirements  and  procedures,  hinders  cross-border  service  provisions  and  cause 
significant administrative burden. 

Actions: 

44 For more details see SMET report 2023-2024. 

15 

 
 
 
 
•  Continue supporting the co-legislators to conclude negotiations on:  

o 

o 

the revision of Regulations (EC) Nos 883/2004 and 987/2009 on social security 
coordination; 
the  proposal  for  a  public  interface  for  the  declaration  of  posting  of  workers 
(COM 2024/531).  

•  Launch a Fair Labour Mobility Package (2026), including – inter alia: 

o  Following  up  to  the  ongoing  pilot  activities,  proposal  of  a  European  Social 

Security Pass (ESSPASS)  

o  Proposal for strengthening of the European Labour Authority (ELA) including 

reviewing its mandate 

o  Consider  measures  to  make  it  easier  to  temporarily  provide  services  cross-

border, while protecting workers’ rights 

10. Territorial supply constraints 

Territorial  Supply  Constraints  (TSCs)  in  retail  and  wholesale  fragment  the  Single 
Market, limit consumer choice and contribute to significant price differences across the 
EU, notably for daily consumer goods. Territorial supply constraints are limitations imposed 
by  certain  large  manufacturers  that  make  it  very  difficult  or  impossible  for  retailers  to  buy 
products in one Member State and resell them in another. This harms cross-border business 
and  breaks  the  promise  of  the  Single  Market  to  bring  choice  and  price  competition  to  the 
consumer45. While competition law is an effective tool to penalise such practices when they 
are the result of agreements or of unilateral practices by dominant operators46, many fall outside 
its scope, notably when they result from unilateral practices of large manufacturers that are not 
in a dominant position within the meaning of competition law. The Commission will weigh up 
the necessary measures  to  address  such  supply constraints on the part of significant  market 
players when they lead to unjustified price differences that cannot be explained by objective 
factors such as regulatory or cost differences between Member States. Other actions such as in 
the area of labelling included in this Strategy will also help addressing TSCs as fragmented 
national rules may facilitate these practices. 

A large manufacturer of branded foods sells the same product in several countries, however in some 
countries  the  product  is  a  lot  cheaper  than  in  others  and  this  difference  cannot  be  explained  by 
taxation or labour costs. A supermarket chain which is also active in those countries wants to buy the 
product in the country where it is cheaper and sell it at a lower price also in other countries. The 
manufacturer then stops supplying the product to the supermarket in the country with a lower price 
to prevent it from selling the product cheaply in other countries, in order to maintain the artificial 
price difference between the countries. 

Action: 

45 With a degree of uncertainty, an independent study carried out for the European Commission in 2020 estimated 
that if TSCs were removed, consumers could save up to EUR 14.1 billion per year on their purchases of certain 
products.  The pass-on  of  these  possible  gains  to  consumers  will  depend,  among  other  factors,  on  the  level of 
competition in retail markets. 
46 On 23 May 2024 the Commission fined Mondelez EUR 337.5 million for hindering the cross-border trade of 
chocolate,  biscuits  and  coffee  products.  Previously,  in  2019,  the  Commission  had  fined  AB  InBev  EUR  200 
million for restricting cross-border sales of beer. 

16 

 
 
 
 
•  Develop  tools  to  act  against  unjustified  Territorial  Supply  Constraints  to  cover 
situations  beyond  those  captured  by  competition  law,  such  as  unilateral  practices  of 
large manufacturers (Proposal - Q4 2026) 

Chapter 2. Boosting European Services Markets 

The  EU  economy  is  a  services  economy,  but  the  Single  Market  for  services  remains 
profoundly underdeveloped. Services account for around 75% of EU GDP and most EU jobs 
are created in services47. 40% of the value added of EU products is made up of services content. 
However, at 7.6% of EU GDP, intra-EU services trade is no higher than services trade with 
third countries, confirming that the Single Market for services operates far below potential48. 
Despite progress, around 60% of services barriers are of the same type as 20 years ago49. A 
new approach is therefore needed. 

The broad diversity of services across the economy implies limits to the effectiveness of a 
one size fits all horizontal policy approach, while the business case for integrated services 
markets is particularly strong in some services sectors. Business services account for 7% of 
EU GDP and bear clear similarities across Member States but remain regulated very differently 
between them. Retail services account for 12% of EU GDP while markets remain national and 
characterised by low productivity. Construction makes up for 11% of EU GDP, but only 1% of 
construction services are traded cross-border as construction markets continue to operate along 
national lines. Efficient postal services are at the heart of the Single Market, enabling cross-
border economic activity. Other services are however often local in nature and less likely to 
trade cross-border. 

A new sectoral policy approach can give a new dynamic to the Single Market for services. 
The existing horizontal policy approach will be complemented with sector-specific services’ 
initiatives that will focus on services sectors which are the most relevant for the twin transitions 
and could bring the highest economic added value and replace diverging national rules creating 
legal fragmentation. 

Ensuring seamless and efficient cross-border provision of industry-related services such 
as  installation,  maintenance  and  repair  services  is  crucial  for  Europe’s  manufacturing 
sector.  As  manufacturing  industries  increasingly  shift  toward  servitisation  –  integrating 
product and service solutions – stakeholders have raised concerns that regulatory barriers, such 
as burdensome posting  of workers  requirements,  prior  checks, ex ante services declarations 
and  varying  work  safety  standards  hinder  the  smooth  cross-border  delivery  of  services  like 
installation, maintenance and repair with negative impacts on industrial competitiveness. 

Business services are among the highest regulated services in some but not all Member 
States. Among the 5700 regulated professions feature many business services, such as legal, 

47 National accounts and GDP - Statistics Explained. Source: Eurostat. 
48 European Commission: Annual Single Market and Competitiveness Report 2025; COM (2025)26.  
49 European Commission Single Market Economic Paper: 30 years of Single Market – Taking stock and looking 
ahead, December 2022. 

17 

 
 
 
accounting and tax advisory services  that have economy-wide impacts. A 10% reduction of 
services barriers would increase EU gross value added in business services by 0.8%50. 

Restrictive  and  diverse  regulation  of  construction  services  holds  back  the  supply  of 
affordable  and  energy-efficient  housing  and  infrastructure  development.  Stakeholders 
have  raised  concerns  over  limitations  to  professional  mobility  due  to  the  high  number  of 
regulated  professions  in  the  sector  and  complex  mutual  recognition  of  professional 
qualifications; weak mutual recognition of national certificates; and proof of competence in 
areas such as health and safety, energy efficiency and environment. Limited availabilities of 
liability insurance in cross-border situations further complicate cross-border services provision 
and is an issue that requires market-based solutions. A 10% reduction of barriers in construction 
services would increase EU gross value added by 0.5%51. Moreover, spatial planning, building 
and  renovation  projects  are  often  subject  to  complex,  slow  and  fragmented  authorisation 
procedures which vary greatly across the EU. This holds back the potential of a functioning 
Single Market that could deliver affordable housing quickly and at scale. 

Retail competitiveness is held back by numerous restrictions of the establishment of shops 
and their operations. Many of these restrictions may be justified by legitimate public policy 
objectives  such  as  town  and  country  planning  and  maintaining  the  vitality  of  city-centres. 
However,  they  need  to  be  proportionate  as  some  may  create  market  entry  barriers  and 
negatively affect competition, productivity and innovation. A 10% reduction of barriers in retail 
services would increase EU gross value added by 0.6%52. 

Demand for postal services in the EU has been declining for years, while the market for 
parcel deliveries continues to grow on the back of strong e-commerce. The decline in postal 
volumes has led to a strong increase in letter delivery costs and to questions  about delivery 
frequencies.  As  the  digitalisation  of  society  and  growth  of  e-commerce  are  projected  to 
continue,  mail  and  parcel  delivery  services  require  attention  to  ensure  a  level  playing  field 
between  market  participants,  increase  price  transparency  and  support  consumer  rights.  A 
reform  of  the  EU  postal  regulatory  framework  will  focus  on  delivery  as  a  service  and  will 
ensure citizens and businesses can receive deliveries throughout the EU at affordable prices, 
while promoting fair competition on delivery markets and increasing consumer protection. 

More than thirty years after its inception, the Single Market is  still not complete with 
respect to telecommunications, energy-related, transport and financial services, we need 
bold  and  urgent  action  to  accomplish  this.  Sector-specific  services  policies  have  already 
been developed, a process that is, however, continuing.  

The recent Commission strategy for a Savings and Investments Union aims at improving 
the  way  the  EU  financial  system  channels  savings  to  productive  investments,  offering 
better  financial  opportunities  for  EU  savers  and  better  access  to  capital  for  EU 
businesses53. In this context, the Commission created a new channel to gather information on 

50 IFO Institute: Building a Stronger Single Market: Potential for Deeper Integration of the Services Sector within 
the EU; Econpol Policy Report 52/2024. 
51 Ibid. 
52 Ibid. 
53 COM(2025) 124. 

18 

 
 
 
new or existing obstacles to financial market integration and free movement of capital54, and 
has  launched  a  stakeholder  consultation  to  gather  feedback  on  barriers  to  financial  market 
integration55. However, also divergences in national laws, including securities, company, tax 
and insolvency laws, as well as in the effectiveness of administrative and judicial procedures, 
create administrative burden and barriers to  cross-border investment. Achieving  an efficient 
Single Market in financial services would also entail Member States efforts in addressing these 
barriers. 

Energy-related services support efficient production, distribution and use of energy in the EU 
and the clean transition. They support and depend on a modern infrastructure of grids, storage 
and digital inverters and meters that are necessary for a genuine Energy Union. As announced 
in  the Action  Plan  for Affordable  Energy56,  the  forthcoming  European  Grid  Package  will 
support  the  expansion  and  modernisation  of  the  grids  and  interconnectors,  which  in  turn 
requires  and  enables  the  expansion  of  the  energy-related  services  market.  Achieving  our 
interconnection targets  is essential  for uniting  energy markets  and delivering a resilient and 
competitive Energy Union. Energy-efficiency services are key to meet climate objectives and 
reduce  costs  for  consumers  and  businesses,  and  companies  providing  such  services  will  be 
supported  by  the  Commission  to  scale  up  their  activities,  including  through  EU  guarantee 
schemes  with  the  EIB.  The  upcoming  Citizens  Energy  Package  will  moreover  support  the 
growth  of  energy-related  services,  such  as  improving  energy  efficiency  of  buildings.  
Moreover, a White Paper will explore how to deepen electricity market integration and how to 
make the governance framework more robust and fit for decisions of cross-border relevance, 
which will also further support the market for energy-related services. 

The  EU  telecommunications  sector  is  still  fragmented  alongside  national  borders  and  EU 
operators and consumers cannot reap the full potential of the Single Market. Today, there are 
more  than  100  operators  on  the  market  across  Europe.  Moreover,  a  joint  path  to  6G  needs 
additional  spectrum,  more  harmonised  planning  and  frameworks.  Fast  technological  and 
market developments open up new cross-border service-provision possibilities and may require 
a  more  harmonised  framework,  for  example  as  regards  satellite  services,  to  reap  the  full 
benefits. To address those challenges and ensure that Europe has future proof digital networks 
and  secure  and  resilient  infrastructures,  the  applicable  regulatory  framework  needs  to  be 
updated. The transition towards cloud-based infrastructure and Artificial Intelligence requires 
improved access to secure, fast, and reliable connectivity. 

As outlined in the AI Continent Action Plan, the Cloud and AI Development Act will explore 
establishing a common marketplace for cloud capacity and services with a view to ensuring the 
emergence of a true European single market for cloud services and boosting the entry into the 
market of a more diverse set of cloud service providers.  

The completion of a genuine single EU transport market requires eliminating unnecessary 
residual technical barriers impacting the various transport modes. For example, implementing 
the EU’s high speed rail plan will require progress in consolidating the EU’s railway traffic 
management system to increase capacity and ensure seamless interoperability. Enhancing and 

54 For more  details see  the Channel announced in  the Communication on the  Savings  and Investments Union, 
COM(2025) 124. 
55 Targeted consultation on integration of EU capital markets 2025 - European Commission 
56 COM(2025) 79. 

19 

 
 
 
widely deploying interoperable digital tools should reduce the administrative burden associated 
with  ensuring  regulatory  compliance.  Improved  information  and  data  sharing  in  transport 
would  allow  to  get  rid  of  paper-based  documents.  Digital  tools  can  also  simplify  European 
travel  and  tourism  by  allowing  passengers  to  purchase  tickets  through  paperless  means. 
Removing  existing  barriers  to  allow  cross-border  licensing  of  services  delivered  through 
connected and automated vehicles and ensuring fully trusted connectivity between vehicles and 
infrastructure  through  harmonising  technical  specifications  for  cooperative  Intelligent 
Transport Systems (C-ITS) will strengthen our Single market for mobility services. Allowing 
cross-border car rental to become more feasible and affordable for citizens is another way to 
strengthen our Single Market for services and tourism while improving the efficiency of the 
transport system. The Commission will also envisage actions for applying EU single market 
rules and principles to the taxi and private hired vehicles sector. 

Actions: 

•  Propose a Construction Services Act to lower barriers to cross-border market access for 

construction and installation services (Q4 2026) 

•  Work with Member States to simplify permitting and planning procedures to increase 
the supply of housing in the context of the European Affordable Housing Plan and the 
European Strategy for Housing Construction (Q1 2026) 

•  Launch initiative to facilitate the cross-border provision of industry-related services 

• 

such as installation, maintenance and repair services (Q4 2025) 
Issue  guidance  and  recommendations  to  Member  States  to  free  regulated  business 
services from unnecessary regulation hindering investment and trade (Q1 2026) 
•  Develop guidance to Member States on the proportionality of their retail regulation 

(Q4 2026) 

•  Propose a new EU Delivery Act, to replace the Postal Services Directive and Cross-

border Parcels Regulation (legislative proposal Q4 2026) 

•  Propose  a  Digital  Networks  Act  to  simplify  the  legal  framework  and  foster  the 

completion of a Single Market for electronic communications (Q4 2025) 
•  Launch initiative for single digital booking and ticketing for rail (Q4 2025) 
•  Launch initiative for paperless mobility for passengers and goods (Q4 2026) 
•  Launch initiative on cross-border car rentals (Q3 2025) 
•  Ensure  harmonised  implementation  and  enforcement  of  the  existing  horizontal  legal 

framework (EU Services Directive57) (ongoing) 

Chapter 3. SMEs in the Single Market 

Just like EU citizens, European SMEs should only in very exceptional situations have to 
go through ‘passport checks’ in the Single Market. To benefit from specific measures for 
SMEs across Member States, SMEs should not normally be asked to ‘qualify’ or to prove their 
status. The Commission is publishing together with this Strategy a simple and unbureaucratic 
online  tool,  available  in  all  EU  languages,  that  generates  an  SME  ID,  based  on  a  self-

57 Directive 2006/123/EC. 

20 

 
 
 
assessment58.  In  the  spirit  of  administrative  simplification,  where  SME  identification  is 
considered  necessary,  rules  should  refer  to  this  tool.  Beyond  this,  it  should  be  considered 
carefully  whether  additional  proof  of  status  should  be  requested  from  SMEs  in  justified 
circumstances (for example, when applying for SME-specific funding). 

It must become easier for SMEs to ‘travel’ the Single Market, especially in border regions. 
The Commission will use the Network of SME Envoys to work with Member States to further 
promote measures supporting and facilitating SME activity in cross-border trade. SMEs  are 
particularly  impacted  by  Single  Market  barriers  and  obstacles59,  having  less  financial  and 
human  resources  to  tackle  them.  While  3.6%  of  SMEs  already  export  goods  to  other  EU 
countries60, many more could do so61.  While 73% of the high growth SMEs intend to scale up 
in their domestic market, only 24% plan to do so within the Single Market62. Ongoing dialogue 
with Member States and small businesses is essential for developing policies that support SMEs 
and  contribute  to  the  objective  of  reducing  administrative  burden  by  35%  for  SMEs.  The 
Commission will therefore better use the potential of the Network of SME Envoys with these 
objectives  in  mind.  The  Enterprise  Europe  Network  with  over  3500  advisors  will  further 
develop its targeted advice and match-making services to SMEs with a particular emphasis on 
better alerting SMEs to the impact of new legislation and helping them navigate it successfully. 

Drafting legislation which SMEs can comply with necessitates a true commitment to the 
‘think small first’ principle. Regulatory provisions too often turn into administrative burden 
and higher costs for SMEs. To better consider SME interests and mitigation measures, a new 
mandatory  SME  check  has  been  developed  and  will  now  be  implemented  in  Commission 
impact assessments for all initiatives which were flagged as relevant for SMEs63. Furthermore, 
SME-friendly provisions should be systematically considered and included by all rule makers 
when  drafting  and  negotiating  legislation.  SME-friendly  provisions  are  good  practices 
examples  of  legal  clauses  covering  aspects  of  legislation  which  influence  the  business 
environment, are common to multiple legislative acts and are designed to facilitate the practical 
application of legislation by SMEs. Their systematic inclusion in legislation will contribute to 
more  effectively  integrate  SME  needs  and  provide  a  more  stable  and  predictable  business 
environment for SMEs.   

The European Market must be a market where scaling up is encouraged and rewarded. 
SMEs that outgrow their status and scale into so-called small mid-caps (SMCs, companies with 
250-749 employees) typically demonstrate a rapid expansion, increased innovative capacity, 
and a high ability to adapt to digital transformation. Nevertheless, these mid-sized companies 
continue to face specific obstacles, in particular related to administrative burden64. Therefore, 
together with this Strategy, the Commission is presenting a formal definition for small mid-

58 SME Self-assessment tool. 
59 The Single Market principle of the Small Business Act for Europe (SBA) scoreboard evaluates the performance 
of each Member State in this area. 
60 Eurostat (2022), Enterprise statistics by size class and NACE Rev. 2 activity, Trade by NACE Rev. 2 activity 
and enterprise size class. 
61 SME Performance Review Annual Report 2024/2025.  
62 Flash Eurobarometer 559 ‘Startups, scaleups and entrepreneurship’ (forthcoming). 
63 To ensure SME-friendly legislation, the Commission created the SME filter (COM(2020) 103 final). As part of 
the process, the SME Envoys network screens EU initiatives published on the Have Your Say portal and identifies 
those likely to impact SMEs.    
64 SME relief package COM(2023) 535. 

21 

 
 
 
caps65.  To  facilitate  the  scaling  of  enterprises  within  and  beyond  the  SMC  segment,  the 
definition specifically allows companies backed by venture capital and private equity funds to 
benefit from the SMC status. It is suggested to consider this classification also for SMEs, where 
relevant, when using an SME definition for developing targeted funding, mitigation measures, 
or benefits. Additionally, the Commission will take up these considerations when exploring the 
possibility of updating the SME definition66. The SMC package also includes two Omnibus 
proposals with a first set of eight Directives and Regulations to extend mitigation measures 
currently reserved to SMEs also to SMCs along with additional simplification measures.  

The aim is to help companies outgrowing the thresholds of the SME definition to remove 
the  obstacles  they  encounter  in  their  transition.  In  a  second  step,  the  Commission  will 
therefore also take into account the needs of SMCs in relevant evaluations and revisions, for 
example concerning the Public Procurement Directive and the Standardisation Regulation. In 
a third step, SMCs will be considered in upcoming Commission proposals, in particular the 
planned Digital Omnibus, covering among others the AI Act, Data Act, Data Governance Act, 
and Open Data Directive. The Commission will also consider the needs of SMCs in upcoming 
legislation  impacting  sectors  where  SMCs  are  strongly  represented,  including  electronics, 
renewables,  defence  and  space,  and  energy-intensive  industries  (EII)67,  for  example  in  the 
upcoming  Industrial  Decarbonisation Accelerator Act,  the  Defence  Omnibus  and  the  Space 
Act. Finally, SMCs will also be specifically considered in the implementation of acts recently 
adopted, for example the Ecodesign for Sustainable Products Regulation or the Packaging and 
Packaging Waste Regulation.   

More  intense  use  of  intellectual  property  rights  (IPR)  would  improve  SME  access  to 
finance and thus aid their scaling up in the Single Market. IP protection is the key driver 
for intangible asset investment and a strong market signal of SME innovative potential. The 
finalisation of the Patent Package, together with all Member States participating in the Unitary 
Patent System, would go a long way in completing the Single Market for IP, already achieved 
in trademarks, designs and geographical indications. The Commission will issue a report on 
the  functioning  of  the  Unitary  Patent  while  engaging  in  targeted  outreach  activities  to 
encourage  all  Member  States  to  join  the  Unitary  Patent  system.  The  upcoming  European 
Innovation Act  and the Start-up and Scale-up Strategy will propose concrete actions for the 
valorisation  of  IP.   The  Commission,  jointly  with  the  European  Union  Intellectual  Property 
Office (EUIPO)68, will extend the ‘SME Fund’ to 2026 and possibly 2027, and explore covering 
also valorisation, valuation and commercialisation of IP, as well as geographical indications for 
crafts and industrial products related costs. 

Sustainability reporting requests often trickle down to SMEs. Although they are not subject 
to  sustainable  finance  legislation  or  due  diligence  requirements  –  such  as  the  Corporate 
Sustainability  Reporting  Directive  (CSRD)  and  the  Corporate  Sustainability  Due  Diligence 
Directive (CSDDD) – SMEs claim to receive different reporting requests from their partners 
for  the  same  sustainability  information.  Limiting  the  information  that  larger  companies  can 
request from SMEs in their value chain for their sustainability reporting will reduce the burden 

65 C(2025) 3500. 
66  2003/361/EC:  Commission  Recommendation of  6  May  2003  concerning  the definition  of  micro,  small  and 
medium-sized enterprises. 
67 SWD(2025) 501. 
68 https://www.euipo.europa.eu/en. 

22 

 
 
 
on  SMEs. The  Commission’s  proposed  amendments  to  the  CSRD  under  the  first  Omnibus 
package  aim  to  achieve  this  once  they  enter  into  force.  But  to  cover  the  period  until  such 
amendments  are confirmed  and to  provide immediate  clarity for the market,  a Commission 
Recommendation  on  the  Voluntary  SME  standard  developed  by  the  European  Financial 
Reporting Advisory Group (EFRAG) will be published by summer 2025.   

SMEs  encounter  difficulties  in  accessing  sustainable  finance  opportunities.  The 
Commission will aim to support SMEs in two ways. Firstly, the Commission will by summer 
2025 revise the Taxonomy Disclosures Delegated Act in a way that does not limit SMEs access 
to sustainable finance and avoids imposing indirectly disproportionate sustainability reporting 
requirements to SMEs. This revision will address, in particular, the difference in scope of the 
numerator and denominator of the Green Asset Ratio (GAR). Secondly, based on the advice of 
the Platform of Sustainable Finance69 and building on the InvestEU sustainability guarantee 
targeting SMEs, the Commission will develop a voluntary streamlined approach to help SMEs 
to voluntarily disclose to banks and investors their environmental sustainability performance 
when seeking sustainable financing. In addition, the Commission will assess, if any subsequent 
revisions  of  the  delegated  act  would  be  required  to  further  facilitate  reporting  by  financial 
actors, and banks in particular, on how they finance SMEs engaged in sustainable activities. 

Actions: 

•  Provide  an  SME  ID  tool  based  on  self-declaration  available  in  all  EU  languages  to 
facilitate  proof  of  SME  status,  where  appropriate  (together  with  the  Single  Market 
Strategy) 

•  Reinforce the Network of SME Envoys, including to encourage the voluntary adoption 
of measures encouraging SME cross-border trade and contribute to the administrative 
burden reduction agenda (Q3 2025) 

•  Publish best practice examples of SME-friendly provisions that can be systematically 

considered for inclusion in draft legislative acts and negotiations (Q3 2025) 

•  Adopt a definition of small mid-caps and an SMC omnibus (together with the Single 

Market Strategy) 

•  Extend the existing SME fund, implemented by the EUIPO, for 2026 and possibly 2027 

(Q4 2025)  

•  Adopt  a  Commission  Recommendation  for  a  ‘Voluntary  SME’  standard  (VSME)  to 
manage sustainability requests to SMEs stemming from their value chain and financial 
partners (Q3 2025)  

•  Develop  a  voluntary  streamlined  approach  to  help  SMEs  demonstrate  their 
sustainability  efforts  and  improve  their  access  to  sustainable  finance,  including  by 
assessing  the  need  to  amend  the  Taxonomy  Disclosures  Delegated  Act  to  allow 
financial institutions to better reflect their financing activities of those SMEs (Q1 2026 
/ Q2 2026) 

Chapter 4. Digitalising the Single Market 

The  successful  operation  of  the  Single  Market  requires  Member  States  and  the  EU  to 
work  in  sync:  digital  tools  make  this  possible  and  are  fundamental  for  smart  policy 

69 SME advice/report of the Platform of Sustainable Finance – ‘Streamlining sustainable finance for SMEs’, use 
this  direct  (EC)  link  to  the  report,  March  2025  https://finance.ec.europa.eu/publications/platform-sustainable-
finance-report-streamlining-sustainable-finance-smes_en. 

23 

 
 
 
implementation. A  lack  of  administrations  at  national  and  EU  level  working  together  and 
assuming  joint  ownership  for  the  day-to-day  operation  of  the  Single  Market  is  leading  to 
divergent  approaches  and  application  of  common  rules  that  limits  the  effectiveness  of  the 
Single Market. 

The main elements of an effective and modern regulatory framework include clear and 
easy to find online information about requirements, digitally accessible procedures, and 
automated  reporting.  However,  economic  operators  find  it  hard  or  impossible  to  access 
information and accomplish administrative formalities online. Where digital procedures exist, 
difficult-to-interpret 
IT 
ecosystems, and inefficient data exchanges all make it difficult for citizen and businesses to 
comply with regulatory requirements digitally. 

legislation,  non-machine-readable  data 

fragmented 

formats, 

The EU needs a paradigm shift from a document-based to a data-based Single Market. 
We  need  to  move  from  exchanging  paper  documents  towards  exchanging  digital  data. This 
implies  automated  digital  sharing  and  reporting  of  structured  data  allowing  businesses  and 
public  authorities  to  exchange  data  in  real-time,  replacing  cumbersome  paperwork  and 
document-based  compliance  systems  with  interoperable  and  secure  data-based  solutions. 
Embedding the digital-ready principle into policy design and implementation is key70, ensuring 
that  regulatory  requirements  are  designed  from  the  outset  to  be  digital,  interoperable,  and 
streamlined71. 

Companies can already be set up and file information with business registers fully online 
and new digital tools, such as the EU Company Certificate, i.e. an EU corporate identity 
card, will further reduce burdens for companies72. These procedures and tools rely on the 
system of interconnection of business registers (BRIS), which provides access to the official, 
reliable and machine-readable company information and enables a secure ‘once-only principle’ 
exchange of information between business registers, and on the European Unique identifier for 
companies (EUID). Their implementation and development will be essential for future efforts 
to  fully  digitalise  procedures  and  reduce  administrative  burdens  for  companies,  including 
through  the  forthcoming  interconnection  with  the  EU  beneficial  ownership  registers  and 
insolvency  registers  systems,  as  well  as  further  extending  the  use  of  EUID  as  a  company 
identifier in different policy areas. 

Digital identity enables secure, cross-border access to digital services and the sharing of 
data, attributes and credentials with legal effect across the EU. The full implementation of 
the  EU  Digital  Identity  Framework  and  in  particular  the  rollout  of  the  EU  Digital  Identity 
Wallets  at  the  end  of  2026  is  essential  to  support  secure,  trusted  and  cross-border  digital 
interactions for citizens and residents. The upcoming European Business Wallet will establish 
digital identity for economic operators, building on the BRIS and EUID where companies are 
concerned. It will enable sharing verified data and credentials and a legally valid notification 
channel, enabling seamless interactions with public administrations and reducing the cost of 
regulatory compliance. 

70 The Interoperable Europe Act entered into force in April 2024 and will allow for early detection of digitally 
relevant requirements, as well as making interoperability assessments an obligation. 
71  Commission  Communication  on  A  simpler  and  faster  Europe  (COM(2025)  47)  further  explains  how  the 
principles of smart and digital delivery will be integrated in the design of EU laws. 
72 Digitalisation Directive (EU) 2019/1151 and Upgrading digital company law Directive (EU) 2025/25. 

24 

 
 
 
The  Single  Digital  Gateway  (SDG)  provides  one-stop  shop  access  to  information, 
assistance services, and ‘once only’ administrative procedures. Yet the availability of digital 
public services for cross-border users strongly lags behind that for national users73. As a result, 
citizens and businesses still face serious challenges in discovering, retrieving and submitting 
documents required by authorities in other Member States. The Once-Only Technical System 
(OOTS) will enable an automated exchange between authorities of documents and data once 
implemented  in  practice,  requiring  the  connection  of  over  80  000  national  competent 
authorities. Digitalising permitting procedures in the scope of the Net-Zero Industry Act and 
the Critical Raw Materials Act and authorisation procedures for certain services providers are 
first priorities in terms of sequencing. 

While  SDG  and  OOTS  facilitate  seamless  cross-border  access  to  information  and 
procedures, the Internal Market Information (IMI) system  improves coordination and 
cooperation  between  Member  State  authorities.  Exploiting  the  full  potential  of  IMI  to 
facilitate  policy  implementation  involves  broadening  access  to  IMI  and  improving 
interoperability. This will include building a generic, reusable IMI portal to connect businesses 
to IMI, piloting an IMI notification hub and inter-connecting IMI with other systems. 

The Digital Product Passport (DPP) will become the main tool for disclosing and sharing 
product  information  across  all  new  and  revised  product  legislation.  Introduced  by  the 
Ecodesign for Sustainable Products Regulation, the DPP will serve as a digital container for 
digital labels, conformity documentation, instructions and manuals, certain safety information, 
technical documentation, and other information required under EU law and has already been 
included in several new EU legal acts. A data carrier affixed on the product, such as a QR code, 
will  provide  access  to  this  information. The  first  DPP,  for  batteries,  is  expected  to  become 
operational in 2027 and the tool will be progressively rolled out to other product categories. 
The simplification Omnibus proposals adopted by the Commission together with this Strategy 
aim to take the first steps toward aligning EU product legislation with the digital age, by also 
allowing instructions for use to be made available mainly in electronic form and by digitalising 
declarations  of  conformity.  The  full  digitalisation  of  declarations  of  conformity  and  the 
consumer-friendly digitalisation of instructions of use by the Omnibus will result in swift cost 
reduction for both economic operators and authorities.  

The upcoming NLF reform will fully introduce the DPP to demonstrate compliance with 
EU product legislation. The potential use of the DPP IT infrastructure to enable the automated 
re-use of data by companies will also be assessed, to streamline reporting and verification by 
authorities. It will also explore ways to digitalise processes for product certification, ensuring 
that conformity assessments are managed in a structured and transparent way, which will save 
companies and authorities time and money. 

Non-machine-readable  data  formats  lead  to  less  efficient  and  more  expensive 
standardisation  processes.  This  makes  it  difficult  for  SMEs  to  contribute  to  developing 
standards and to identify and use relevant standards. Developing structured, machine-readable 
data formats for EU standards will bring more transparency and make it easier for companies 
to  contribute  to  the  standardisation  process. As  part  of  the  revision  of  the  Standardisation 
Regulation, this structured-data format will become the rule, which will increase efficiency, 

73 eGovernment benchmark 2024. 

25 

 
 
 
make standards more usable and will reduce costs and administrative burden for companies, 
and also offer trainings to help companies transition to the new format. 

Although the new public procurement data space is already bringing benefits, the Single 
Market’s public procurement IT ecosystem remains fragmented, and data exchanges are 
inefficient. This means that national databases are not sufficiently interoperable, resulting in 
less  competition  and  meaning  suppliers  have  to  submit  the  same  information  and  evidence 
again  and  again.  In  the  short  term,  public  procurement  procedures  will  be  made  more 
standardised 
through  an  ongoing  European  Committee  for  Standardisation  (CEN) 
standardisation request. In the context of the revision of the Public Procurement Directives, the 
once-only principle should be embedded in law, so it is possible for companies to participate 
in public procurement across Europe without having to repeatedly submit the same information 
and evidence. Digital authentication will also be introduced in public procurement processes. 
The digital transformation of public administration in construction services should be advanced 
through  the  use  of  specific  digital  tools,  such  as  Building  Information  Modeling  (BIM) 
software, in public procurement processes. 

A key digital enabler of the Single Market, eInvoicing delivers immediate cost savings by 
automating invoice processing and exchange. eInvoices allow to automate VAT and other 
reporting obligations, such as for sustainability reporting or customs formalities. EU legislation 
on eInvoicing in public procurement promotes an EU eInvoicing standard, but there is limited 
adoption of eInvoicing among EU businesses, low uptake of the EU eInvoicing standard, a lack 
of  interoperable  solutions  and  low  reuse  of  data. A  set  of  measures  is  envisaged  to  ensure 
interoperability  and  the  deployment  of  the  European  eInvoicing  standard  and  eDelivery 
technical specifications, including a Commission Recommendation to integrate an eInvoicing 
module into all accounting software solutions and auditing national certifications schemes. In 
parallel, it is planned to pilot the reuse of eInvoicing data for sustainability reporting, and to 
increase customs transparency by linking eInvoicing data with customs data, in alignment with 
the development of the EU Customs Data Hub. 

The  Single  Digital  Gateway,  the  Once  Only  Technical  System,  the  Digital  Product 
Passport, eInvoicing, the forthcoming European Business Wallet, the Business Register 
Interconnection System and the European Unique identifier for companies, and various 
other  initiatives  aimed  at  streamlining  data  exchange  and  digital  reporting  will 
collectively establish a cohesive ecosystem of digital solutions. These tools are designed to 
create synergies that facilitate and simplify doing business in the EU. In addition to enhancing 
day-to-day efficiency for businesses, this interconnected suite of digital tools will also foster 
greater economic integration and drive innovation throughout Europe. 

Actions: 

• 

Introduce the European Business Wallet for doing business simply and digitally in 
the EU (Legislative proposal Q4 2025) 

•  Roll out the EU Digital Identity Wallets across all Member States as a safe, reliable, 

and private means of digital identification for everyone in Europe (Q4 2026) 

•  Revise the IMI Regulation to streamline the procedure for expanding IMI to cover 

new areas (Legislative proposal Q4 2026) 

•  Digitalise  declarations  of  conformity  and  certain  other  product  documentation 

(Omnibus proposals together with the Strategy) 

26 

 
 
•  Amend EU legislation to extend the use of the DPP as a digital container for product-
related information (part of the NLF revision, Q2 2026) and ensure its technical roll-
out 
Introduce digitalisation provisions in the revised legal framework for standardisation 
and public procurement (Q2 2026 and Q4 2026) 

• 

•  Revise the acquis on e-Invoicing in public procurement turning the existing Directive 
into  a  Regulation  and  making  the  EU  eInvoicing  standard  mandatory  for  public 
procurement (Q4 2026) 

Chapter 5. Enforcing respect of Single Market rules  

The European market can provide leverage through scale only when it is a true Single 
Market. Even the best rules cannot accomplish their objectives, if they are not implemented 
or applied in a smart and uniform way. Effective, proactive and fast enforcement of those rules 
ensures that benefits of the Single Market become a tangible reality for businesses and citizens. 
Both the Letta report and the Draghi report call for better enforcement of the Single Market.  

Correct application and enforcement of the Single Market rules is a shared responsibility 
of  the  Commission  and  the  Member  States,  including  authorities  from  national  to 
regional and municipal level. In addition to naming the high-level Single Market Sherpa, it is 
essential that Member States reinforce their national Single Market compliance capacities, in 
particular to address individual issues raised against national measures or practices considered 
incompatible  with  the  Single  Market  and  support  businesses  and  citizens  with  fast,  easily 
accessible and effective means in making use of their Single Market freedoms. Member States 
shall complement the role of the Commission as the guardian of the Treaties and ensure joint 
ownership of the Single Market as described in Chapter 1. 

Preventing new Single Market barriers 

Prevention  is  better  than  cure.  It  starts  from  the  very  moment  that  a  Member  State  is 
considering a new rule. More than ever, it must be a priority in each Member State, to counter 
further fragmentation of the Single Market, foster a better compliance culture and reinforce the 
prevention of new regulatory barriers. The most important preventive tools are notifications 
under  the  Single  Market  Transparency  Directive74  and  under  the  Services  Directive75.  In 
addition, the Proportionality Test Directive76 provides for ex-ante proportionality assessments 
of  new  regulation  of  regulated  professional  services  by  Member  States.  These  tools  create 
transparency about new national rules and enable discussion with Member States to ensure in-
depth assessment of their impact on the Single Market to prevent new barriers. If necessary, 
the  existing  preventive  instruments  will  be  enhanced,  in  particular  through  improved 
transparency and stakeholder consultation.   

A thorough assessment of planned national rules that could create barriers in the Single 
Market is essential to limit such barriers to what is strictly necessary to protect legitimate 
public  interests.  Proportionality  plays  a  decisive  role  in  that  regard.  Member  States  shall 
conduct  a  thorough  assessment  of  proportionality  before  adoption  of  national  rules.  The 

74 Directive (EU) 2015/1535. 
75 Directive 2006/123/EC. 
76 Directive (EU) 2018/958. 

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Commission will ensure a regular and in-depth monitoring of such assessments, in particular 
where EU law sets out specific rules or procedures for those77.   

Collaborating to reduce Single Market barriers 

Close  collaboration  between  Member  States  and  the  Commission  is  essential  for  the 
effective implementation of the Single Market rules and the removal of existing barriers. 
The key platforms allowing structured collaboration are the SOLVIT network78, helping with 
solving individual cases where citizens and businesses encounter obstacles when moving or 
doing business across borders, and the Single Market Enforcement Taskforce (SMET)79.  

While  both  SOLVIT  and  SMET proved  successful,  we  need  to  further  strengthen  and 
expand their work, translating conclusions into concrete follow-up actions. Member States 
should reinforce their SOLVIT Centres, focusing on staffing, expertise, network of contacts 
and  capacity  to  influence  other  national  authorities.  The  Commission  will  address  Single 
Market  barriers  detected  by  SOLVIT,  including  by  launching  infringement  procedures  if 
deemed necessary, and continue reporting on  SOLVIT cases, including in the future Annual 
Progress Reports on Enforcement and Implementation to the European Parliament and Council. 
SMET  will  be  reinforced  to  tackle  more  effectively  the  most  significant  barriers  for  goods, 
services, people and capital in the Single Market, hindering EU competitiveness. This will be 
done via the annual high level political meeting80. In addition, the Commission will carefully 
analyse the results of SMET work. If the barriers have not been sufficiently removed, it will 
take concrete follow-up actions, such as infringement procedures if the barrier is related to a 
breach of EU law, revision of legislation or a new legislation if the barrier is due to the absence 
or unclarity of EU rules.   

Efficient legal action where required 

Effective, proactive and fast legal action is important for strategic enforcement of Single 
Market  rules.  Infringement  procedures  are  a  forceful  tool  entrusted  to  the  Commission  to 
ensure  the  respect  of  the  Single  Market  rules.  Where  the  Commission  decides  to  open 
infringement procedures for breaches of Single Market rules, the Commission will accelerate 
them both internally and in its dialogue with the Member States. Infringement procedures will 
be accompanied by transparent communication and clear explanations regarding the objectives 
pursued, the expected benefits of infringement decisions as well as the results achieved in cases 
where proceedings are closed.  

Driving strategic enforcement priorities will be key. In addition to ensuring enforcement in 
response  to  significant  breaches  of  EU  law  indicated  by  stakeholders,  the  focus  will  be  on 
proactive  and  strategic  enforcement  of  Single  Market  rules.  The  Commission  will  identify 
priority policy areas and present them in an annual Single Market enforcement agenda, conduct 
a systematic investigation into the implementation and application of Single Market rules in 
these areas, and where appropriate, launch infringement procedures in a coordinated manner. 

77 For instance, the Proportionality Test Directive (Directive (EU) 2018/958 ). 
78 For more details see SOLVIT website. 
79  See fn. 20. 
80 See more on SMET annual high-level political meeting in Chapter 1. Removing barriers: Doubling down on 
the ‘Terrible Ten’. 

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Actions: 

•  Propose a Single Market Barriers Prevention Act (Q3 2027, if necessary, based on the 

assessment of the functioning of existing preventive tools) 

•  Call a first meeting of the high-level Single Market Sherpas (Q4 2025) 
•  Organise a first SMET annual high-level political meeting (Q4 2025) 
•  Strengthen the national SOLVIT centres and the whole Network for more efficient 

problem solving and better support of business cases (Q4 2025)  

•  Systematic follow-up by the Commission and Member States on structural issues 

identified by SOLVIT and on barriers, where SMET efforts have not been successful 
(as of Q2 2025) 

•  Present the first Annual Single Market enforcement agenda (Q1 2026, to be linked to 

publication of the Annual Single Market and Competitiveness Report) 

Conclusion 

At a time of extraordinary global uncertainties, we must make our own European Market 
work to its full potential. The Single Market was set up over thirty years ago to develop a 
European social market economy that brings our people together in prosperity. We have come 
a long way. And yet we can and must do more to supress barriers, simplify rules and enable 
businesses to grow. To protect EU citizens and businesses from unfair competition, risks and 
unpredictable global turbulence and continue to give them a framework based on the rule of 
law, predictability and legal certainty. It is the European Market that allows us to enhance our 
internal value chains. 

A strong Single Market gives Europe a strong voice globally and the EU remains a strong 
and reliable partner for like-minded countries both globally81 and within the region. Next 
to the participation in the Single Market of the EEA-EFTA countries, the Commission proposes 
a structured framework to boost the inclusion of the Western Balkans, Ukraine and Moldova. 
This ‘highway’ to the Single Market would include closer regulatory alignment and facilitating 
the integration of their industries into European value chains ahead of full EU accession.  In 
addition,  whilst  the EU is and will remain one of the most open economies,  global trade is 
drastically altered by unfair practices, unjustified tariffs and distortive subsidies of some third 
countries. To re-establish the level-playing field and because the Single Market cannot be the 
export destination of state-induced excess capacity and trade diversions, the EU will make full 
use, whenever necessary, of trade defence tools (including safeguards) and justified tariffs. 

Further  developing  our  European  market  is  a  joint  endeavour.  The  Commission  will 
deliver its part with the actions set out in this Strategy and by using all tools at its disposal to 
ensure compliance with Single Market rules, including by launching infringement proceedings 
where  necessary. We  call  upon  the  European  Parliament  and  Council  to  work  together  and 
make the adoption of Single Market proposals a priority. Together we should aim to have  a 
modernised and digitalised European Market framework in place by 2030. 

81  The  Commission  will  continue  to  engage  with  the  UK,  Canada,  Japan,  South  Korea  and  other  like-minded 
countries, notably through free trade agreements and more targeted and flexible partnerships.  

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Member States have a main role to play as the daily application of EU rules is in their 
hands. It is therefore key that Member States bring their policy and legislation in line with our 
common objectives and rules to ease business and allowing companies to operate across the 
European Market with greater ease.  

The European Council announced it will take stock of progress made with the further 
development of our European market and ensure political  support. The Commission is 
ready to support this effort and will update on progress made with the implementation of this 
Strategy  in  its  Annual  Single  Market  and  Competitiveness  Report,  including  its  key 
performance indicators. 

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