Breaking News: European Commission Unveils Bold New Strategy to Reinvent the Single Market

In a bold move to revitalize the European Union's (EU) economic engine, the European Commission has unveiled a sweeping new strategy: “The Single Market: Our European Insurance in Today's Uncertain World.” 3E has obtained an advanced copy of the highly anticipated draft, which outlines an ambitious blueprint to reshape the EU single market into a “single, simple and seamless” framework, fit for the geopolitical and digital realities of this decade.

As noted in the draft strategy by the commission to the European Parliament, the European Council, the European Economic and Social Committee, and the Committee of the Region, “The European Market, our home single market, is a powerful catalyst for growth, prosperity, and solidarity. With a GDP of EUR 17 trillion, it is the second largest economy in the world, accounting for almost 18% of the global economy, providing the EU with scale, strength, and agility.”

According to the draft, the EU economy brings together 450 million consumers and 26 million companies, with the European market offering access to a wide range of products, services, and investment opportunities.

The reform is tightly aligned with the 2024 Competitiveness Compass, which established the priority areas for long-term European competitiveness. The commission now seeks to operationalize those metrics within the single market context and estimates that a fully optimized market could unlock an additional €1.3 trillion in annual economic benefits.

A Six-Pillar Strategy

At the heart of the proposal is a new, six-pillar strategy, which aims to take the following actions:

Tear down barriers

The commission will dismantle the “Terrible Ten” - the 10 most harmful single market obstacles as highlighted in the EU 2025 Annual Single Market and Competitiveness Report - including hurdles such as intricate labeling rules and extended producer responsibility (EPR) requirements.

Boost services trade

With intra-EU services trade still underperforming, the commission proposes sector-specific actions highlighting service sectors that could stimulate the highest economic value. Key proposals include a Construction Services Act and a Digital Networks Act (Q4 2025–Q4 2026), along with initiatives to remove regulatory bottlenecks in retail, postal services, and business services.

Empower SMEs and midcaps

Small and medium-sized enterprises (SMEs) remain especially vulnerable to administrative complexity, so the strategy introduces a SME ID and extends certain regulatory exemptions to small midcaps. A formal definition of small midcaps (250–499 employees) will extend SME-style regulatory relief to growing firms. The commission also plans a Voluntary SME Standard (VSME) to curb inconsistent sustainability reporting requests via the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.

Digitize market governance

A shift from document-based to data-based compliance is underway. Declarations of conformity (DoCs) will move to digital-only formats. Digital product passports (DPP), integrated with the Ecodesign for Sustainable Products Regulation (ESPR), should support automation and reduce compliance costs.

Slash red tape through an Omnibus legislative package

Omnibus legislative packages are poised to eliminate redundant obligations, simplify public procurement, and embed the Single Market Test in policymaking.

Stronger enforcement and ownership

To avoid new fragmentation, member states will appoint single market sherpas with cross-ministerial authority. A stronger Single Market Enforcement Taskforce (SMET) and a proposed Barriers Prevention Act (by 2027) will prioritize long-term compliance and alignment with EU law.

A Safe Haven

“While the world is plunging into a period of economic uncertainty caused by trade tensions, our European Market is a safe haven,” notes the European Commission in the draft strategy. In a nod to past criticism, the commission promises not more rules, but more “ambition and commitment” from both Brussels and member states. National governments will be asked to appoint the high-level single market sherpas, who will directly support enforcement and prevent new national-level barriers. The proposal also signals a push for greater integration of EU neighbors, including the Western Balkans, Ukraine, and Moldova, through a new “single market highway” ahead of potential EU accession.

Next Steps: The draft communication is expected to be discussed by EU leaders and the European Parliament in the coming months, with legislative proposals, including the Omnibus package, rolling out through 2025 and 2026.

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