„The single market is not only vital for our economic success, it is also an important prerequisite for our political influence in the world.“ Olaf Scholz, German Finance Minister
#EuroABC – The single market
The European single market was created in 1993 for the free movement of persons, goods, services and capital within the EU. It enables EU citizens to live, work, study and do business in any country in the European Union and to benefit from a wide range of goods and services at competitive prices.
Shared regulations for shared freedoms
From vegetable traders to furniture manufacturers and IT consultants, those who offer goods or services in the European Union can do so in any member state. This is made possible by the European economic union with its single market. Since there are no national borders for goods and services within the EU, new products are not subject to trade restrictions or customs checks either. The same applies to people as to goods, with EU citizens free to travel, live, study, work or retire in any member state. Money can also circulate freely within the single market and EU citizens can invest their money wherever they think it is most profitable.
The EU single market is underpinned by four fundamental freedoms: the free movement of goods, persons, services and capital. These freedoms are enshrined in law and EU citizens can invoke their right to them at any time. To make these freedoms possible within the single market, the member states have aligned and harmonised their national laws with newly created European laws. For example, throughout the economic union, all member states are subject to the same European competition rules. Compliance with these rules is monitored by the European Commission.
Coordinating a common economic policy
The EU member states coordinate their economic policies within the framework of the economic union. The central instrument for this is the European Semester, which has monitored and coordinated economic, employment and fiscal policy in the EU member states since 2011. Every year the European Commission conducts an in-depth analysis of the economic and financial situation of the member states within the framework of the Stability and Growth Pact and the Macroeconomic Imbalance Procedure. The member states are then given political guidance and recommendations in advance of preparing their national budgets.
A central advisory body to the Commission and the Council is the Economic Policy Committee (EPC). It contributes to the Council's work of coordinating member states' economic policies. In the EPC delegates from EU member states, the European Commission and the European Central Bank discuss important issues of European economic policy. Formats and topics include the Tax Dialogue, the dialogue with social partners, and issues of investment, wage and productivity development. Wolfgang Merz, Head of Division in the Directorate-General for European policy at the German Finance Ministry, has been president of the EPC since June 2017.
- Around 500 million people benefit from the economic union in Europe.
- At the heart of the single market are the four freedoms: the free movement of goods, services, capital and persons.
- Around 60 percent of German exports go to countries in the EU single market.