EU Single Market Faces Trade Decline and Regulatory Delays

Intra-EU trade has recorded its first drop in a non-pandemic year since 2016, according to a draft of the bloc’s annual single market report. The unpublished data reveals not only a decline in trade between member states but also a worsening timeline for EU-wide product standard approvals—now taking four years, up from 3.2 years in 2023.

European Central Bank President Christine Lagarde had previously described the internal market as "frozen," a characterization underscored by the report’s findings. Brussels’ delays, conflicting national rules, and high energy costs are cited as key drags on competitiveness. "The Single Market is our best asset to counter external pressure," the report states, urging stronger mobilization of its strengths.

Despite incremental progress in digital tools and professional qualification recognition, foreign direct investment into the EU has plummeted by 22% over five years. The European Commission attributes this to fragmented national regulations, which "continue to make it complex and costly to establish and operate companies across the EU." Francesca Stevens of Europen, a packaging industry group, sums it up bluntly: "Europe’s loss of competitiveness is largely self-inflicted."