Annexes to COM(2024)77 - “The 2024 Annual Single Market and Competitiveness Report” - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)77 - “The 2024 Annual Single Market and Competitiveness Report”. |
|---|---|
| document | COM(2024)77 |
| date | February 14, 2024 |
The EU has also adopted a series of new instruments alongside its trade defence instruments to defend competition on an equal footing107. The Commission has launched in particular a formal investigation against distortive subsidies of imported battery electric vehicles from China108.
Furthermore, the EU has also adopted the European Economic Security Strategy. The Commission responds to identified risks by proposing measures to promote the EU’s competitiveness, to protect the EU’s economic security and to further strengthen cooperation by partnering with a wide range of countries. The Commission adopted in January 2024 a package of proposals to implement this Strategy109.
The EU should build a more modern network of trade agreements, partnerships and alliances, while continuing to work on reinforcing multilateral cooperation and open trade.
At the same time, our improved arsenal of trade protection tools can enhance economic security and resilience. The EU should deploy trade defence to protect the Single Market when necessary and continuously work to assess and address economic security risks in a complex environment.
The Commission and Member States should: (1) actively monitor the resilience of strategic supply chains and engage in the risk assessments foreseen under the Economic Security Strategy; (2) align strategies on supply chains and build industrial capacity in areas of strategic importance, exploiting the synergies of coordinated action, notably via the Semiconductors Board, the Critical Raw Materials Board and the Net-Zero Europe Platform; and (3) promote diversification through cooperation between European and partner countries’ industrial players in projects linked to the raw materials and digital partnerships established by the EU.
Conclusion
In a fast-changing and challenging global geopolitical context, the Single Market remains the EU’s strongest asset. This Communication reminds us that the Single Market is not a static achievement. Its health and the competitiveness of our economies depend on our joint and continuous efforts to tend to it and ensure that it remains aligned with economic realities.
Over the past few years, the EU has modernised the Single Market by organising its digital space, providing a uniform set of rules for businesses to operate online across the EU. The EU is also engaged in promoting a more circular economy, providing business opportunities for companies and savings for consumers.
In addition, the EU has made efforts to remove hurdles to investment. The Commission has initiated a decisive drive to reduce reporting burden. EU instruments support investments in the green and digital transition. The Pact for Skills and measures facilitating labour mobility aim to respond to skills shortages. New measures, such as the Chips Act, the Net-Zero Industry Act or the Critical Raw Materials Act will accelerate manufacturing projects in the technologies of the future and address supply chain vulnerabilities.
This Communication identifies areas for maintaining and improving the EU’s global competitiveness, notably:
- Dedicated efforts to improve and simplify the implementation of agreed rules, including by avoiding “gold plating”, to facilitate doing business and entrepreneurship in Europe.
- The Commission and Member States should accelerate efforts to address energy costs, through accelerated deployment of decarbonised energy and investment in infrastructure, including grids and cross-border interconnections.
- The Commission and Member States should continue to prioritise the deployment of a true and deep Capital Markets Union, to facilitate access to private funding, not least to risk and venture capital, and to enable the scaling-up of companies in Europe.
- Continued public investment is needed to ensure Europe’s competitive edge in key priority areas, in the light of the success of Next Generation EU and REPowerEU. Timely implementation of Union funds such as Cohesion policy instruments can contribute to the level playing field and enhance regional convergence in the Single Market, including through increased investments in strategic technology fields covered by STEP.
- Steps are required to further prioritise research efforts and strengthen the translation of research results into practical business applications.
- Not least to ensure that EU undertakings can continue to thrive in digital, clean tech and other strategic sectors, the EU should continue to promote fair and open trade and employ trade defence instruments to protect the Single Market when necessary.
- The skills and labour gaps should receive increased attention in the context of wider demographic trends, notably via efforts on education and training, but also by easing skills and talent mobility within and to the EU.
Against this background, this Communication lays out areas and directions to succeed in the drivers agreed in the Long-Term Competitiveness Strategy and to work towards the objectives set there and in the Communication “Single Market at 30”.
This discussion will continue and will see crucial contributions with the publication of Enrico Letta’s upcoming High-Level Report on the future of the Single Market and Mario Draghi’s Report on the future of European competitiveness.
Pending these contributions, the Commission invites the Council, the European Council and the European Parliament to discuss the current situation and prospects for progress in the Single Market and competitiveness in light of the present Report.
1 See the Single Market Scoreboard (Economic resilience | Single Market Scoreboard (europa.eu), trade section).
2 The Single Market at 30, of 16 March 2023, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52023DC0162.
3 Long-term competitiveness of the EU : looking beyond 2030, 16 March 2023,https://commission.europa.eu/system/files/2023-03/Communication_Long-term-competitiveness.pdf.
4 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
5 Mapping the Cost of Non-Europe 2019-24, Study of the European Parliamentary Research Service, 2019 (also cited in the Single Market at 30 Communication).
https://www.europarl.europa.eu/thinktank/en/document/EPRS_STU(2019)631745
6 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends
7 Annual Burden Survey 2022, https://commission.europa.eu/system/files/2023-09/ABS_20230912_0.pdf
8 Proposal for a Directive to further expand and upgrade the use of digital tools and processes in company law - all documents - European Commission (europa.eu)
9 COM (2023) 534
10 https://single-market-economy.ec.europa.eu/single-market/single-digital-gateway_en
11 Annex II of Regulation (EU) 2018/1724.
12 https://www.postingdeclaration.eu/landing.
13 https://ec.europa.eu/commission/presscorner/detail/en/IP_23_5730
14 https://commission.europa.eu/document/download/7ad24728-71d5-4148-a6a6-2af7551726fe_en?filename=Communication Interoperable Europe Act
15 2024 Commission work programme - European Commission (europa.eu)
16 https://commission.europa.eu/system/files/2023-10/Factsheet_CWP_Burdens_10.pdf
17 Three out of the eight opinions planned for 2024 are related to reporting obligations, covering automating sustainability reporting; actions and methodology to avoid the build-up of unnecessary reporting obligations; and on the Sustainable Finance Disclosures Regulation.
18 Regulation (EU) 2022/1925
19 Regulation (EU) 2022/2065
20 Regulation (EU) 2022/868
21 Data Act | Shaping Europe’s digital future (europa.eu)
22 https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai
23 Single market emergency instrument - European Commission (europa.eu) Co-legislators have found agreement on 1 February 2024, and SMEI is expected to be adopted during this legislature.
24 SMEI / IMERA: Council and Parliament strike a provisional deal on crisis preparedness - Consilium (europa.eu)
25 SME Relief Package (europa.eu). See also annex 3A to this report SME relief package policy tracker.
26 Study to map, measure and portray the EU mid-cap landscape - https://op.europa.eu/en/publication-detail/-/publication/ad5fdad5-6a33-11ed-b14f-01aa75ed71a1/language-en/format-PDF/source-277396461
27 https://www.esri.ie/system/files/publications/BKMNEXT429.pdf
28 https://eur-lex.europa.eu/EN/legal-content/summary/general-block-exemption-regulation.html
29 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.508.01.0001.01.ENG&toc=OJ%3AC%3A2021%3A508%3ATOC
30 The European Council decided to open negotiations with Ukraine and the Republic of Moldova, open accession negotiations with Bosnia and Herzegovina once the necessary degree of compliance is achieved, and to grant candidate country status to Georgia: europeancouncilconclusions-14-15-12-2023-en.pdf (europa.eu).
31 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
32 See for instance the Council Recommendation on the economic policy of the euro area, COM(2023) 903 final.
33 EIB Investment Survey 2023: European Union overview.
34 European Monitor of Industrial Ecosystems (EMI) SWD(2024) 77.
35 On 13 February 2023, initially by the EIB Group with contributions from Germany, France, Spain, Italy, and Belgium.
36 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
37 The overall additional investment needs to meet the objectives of the twin transitions have been estimated at around EUR 650 billion annually for 2022 to 2030. https://commission.europa.eu/strategy-and-policy/strategic-planning/strategic-foresight/2022-strategic-foresight-report_en#:~:text=It%20is%20estimated%2C%20at%20lower,regions%20in%20Europe%20and%20beyond. https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_3194
38 Open Data Portal for the European Structural Investment Funds - European Commission | Data | European Structural and Investment Funds (europa.eu)
39 Net-Zero Industry Act (europa.eu).
40 Industrial alliances - European Commission (europa.eu)
41 https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-policy/new-european-innovation-agenda_en
42 Two in batteries, two in semiconductors, two in hydrogen ecosystems and one in cloud and edge computing technologies. See also Annex 2 in SWD(2024) 78.
43 COM(2023) 335 final.
44 https://www.eca.europa.eu/en/publications/SR-2023-28. The 2021 ‘Buying Social’ guidance issued by the European Commission can support public administrations implementing such criteria, https://ec.europa.eu/docsroom/documents/45767
45 https://single-market-economy.ec.europa.eu/industry/sustainability/net-zero-industry-act_en.
46 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
47
https://op.europa.eu/en/web/eu-law-and-publications/publication-detail/-/publication/04797497-25de-11ee-a2d3-01aa75ed71a1
48 Long-term competitiveness of the EU looking beyond 2030 | European Commission (europa.eu)
49 Total R&D spending (as a percentage of GDP) and total patent filings (PCT, per million inhabitants) have both been around 25%-40% below the USA in recent decades
50 One reason for the lower rate of R&D investment of the EU business sector as opposed to US is due to structural differences in R&D business investment sector profile. Both the USA and China exhibit particularly high R&D investment in high growth areas such as the IT/ICT and related services and in health-related areas (particularly the US). In comparison, the EU leads in R&D investments of the automotive sector and has a broader industrial portfolio investing in R&D, including in industries developing and applying green technologies, for decarbonisation as well as the circular economy. For additional details, see the 2023 EU Industrial R&D Investment Scoreboard, European Commission, Joint Research Centre, Publications Office of the European Union, 2023,
https://data.europa.eu/doi/10.2760/506189.
51 EIB Investment Survey 2023: European Union overview.
52 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 77-78 provides information on longer trends.
53 The IC consumption band refers to medium-sized consumers with annual consumption between 500 MWh and 2000 MWh and provides for a proxy on affordability.
54 Climate Action Progress Report (2023) - COM/2023/650 final.
55 Eurostat, Air emissions accounts, greenhouse gases by NACE Rev. 2 activity, quarterly data.
56 See for instance Orgalim’s Autumn 2023 Economic Outlook.
57 Reform of the EU electricity market design (europa.eu)
58 Moreover, the Member States’ alliance of nuclear energy has announced the intention to reach 150 GW capacity of nuclear energy by 2050.
59 COM(2023)757.
60 COM(2022)552.
61 COM(2023)669.
62 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
63 This is the relationship between the size of the domestic economy and the use of domestic natural resources.
64 This is the total amount of raw materials consumed by residents: it includes materials used in EU production, adding materials embedded in imports and deducting materials embedded in exports.
65 Europe’s material footprint (europa.eu).
66 Eurostat: Material flow accounts and resource productivity – Statistic Explained (europa.eu).
67 Conditions and pathways for sustainable and circular consumption in Europe — European Environment Agency (europa.eu).
68 See survey on industrial ecosystems in Annex 6.
69 Eco-design for Sustainable Products Regulation (COM/2022/142).
70 Regulation (EU) 2023/1542.
71 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
72 ICT global market share worldwide 2023 | Statista.
73 Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022.
74 https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade. It is a comprehensive framework that guide and coordinate all actions related to digital with an industrial policy approach. Notably, it sets and monitors the achievement of Digital Decade targets, as measurable goals for connectivity, digital skills, digital business and digital public services.
75 Association for Computing Machinery, TechBriefs, summer 2023/ issue 8 -3626110 (acm.org).
76 Commission launches AI innovation package to support Artificial Intelligence start-ups and SMEs | Shaping Europe’s digital future (europa.eu).
77 SWD(2021)352 Strategic dependencies and capacities, accompanying the update to the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery.
78 Already 14 new fabs are planned to go online and become operational by 2030.
79 Including critical raw materials, equipment, wafers, research, pre-production and design.
80 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
81 Communication on Demographic change in Europe: a toolbox for action, COM(2023) 577 final
82 ETUC, “Skills and Quality Jobs in Construction”: 230630_-_jtc_study_report_may_2023.pdf (ituc-csi.org).
83 For example, the Learning Lab on Investing in Quality Education and Training helps Member States identify policies which are particularly effective in boosting basic and advanced skills.
84 For the 2021-2017 programming period, ESF+ investments in education and skills should amount to over EUR 42 billion (total budget), with over EUR 15 million dedicated to adult learning. National plans to use the resources of the ESF+ or the Recovery and Resilience Facility include many activities to re-skill the workforce; for about half Member States, they also include action towards schemes of individual learning accounts, implementing a Council Recommendation of June 2022.
85 Skills academies develop learning programmes offered to education and training providers in the Member States. Based on the existing model in the batteries sector, the academies aim to train 100 000 learners each within 3 years from their establishment. In addition, the Cyber Skills Academy will bring together existing initiatives on cyber skills and improve their coordination, in view of closing the cybersecurity talent gap Cyber Skills Academy | Digital Skills and Jobs Platform (europa.eu).
86 harnessing-talents-regions_en.pdf (europa.eu)
87 European Commission (2023), Employment and Social Developments in Europe.
88 Labour mobility and matching across borders | Single Market Scoreboard (europa.eu). In addition only 17% of EU citizens appear to have ever lived or worked in a country other than their own (see European Commission (2022), Eurobarometer 528 “Intra-EU mobility after pandemic”).
89 European Commission (2023), Flash Eurobarometer 537 ”SMEs and skills shortages”.
90 Flash Eurobarometer 529 European Year of Skills: Skills shortages, recruitment and retention strategies in small and medium-sized enterprises Report.
91 Access to Services and Services Markets | Single Market Scoreboard (europa.eu).
92 Communication on Skills and Talent Mobility, COM(2023) 715.
93 C(2023) 7700 final.
94 COM(2023) 716 final.
95 Data are those available in December 2023. Annex 1 “Overview of Key Performance Indicators (KPIs) on long-term competitiveness” in SWD(2024) 78 provides information on longer trends.
96 Economic resilience | Single Market Scoreboard (europa.eu).
97 REPowerEU (europa.eu).
98 Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission;
SWD(2021)352 “Strategic dependencies and capacities”; SWD(2022) 40 final “EU strategic dependencies and capacities: second stage of in-depth review”; Single Market Economic Papers, n. 14 “An enhanced methodology to monitor the EU’s strategic dependencies and vulnerabilities - European Commission (europa.eu).
99 The risk of SPOFs depends on two product features: (1) the existence of a central node in world trade networks for that product, and (2) a high concentration of world exports in one country. The calculated risk of global SPOF is obtained by combining these two indicators. For further details, please see p. 18 in Single Market Economic Papers, n. 14 (reference above).
100 Annex 5 to this Communication provides an overview of resilience measures of key international partners (SWD(2024) 78).
101 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5245.
102 Deloitte (2023), “Sustainability & Climate IRA and the net-zero race – How EU industrial policy should respond”, p11.
103 This includes, among others, efforts undertaken as part of the Green Deal Industrial Plan, including the Net-Zero Industry Act, the Temporary Crisis and Transition Framework.
104 For instance, in relation to the strategic partnership with Kazakhstan, EU and Kazak companies have established cooperation for the recovery of rare earth elements from uranium mining waste, in airborne geophysical exploration and sustainable processing of two tungsten deposits in Kazakhstan, sometimes with the involvement of EU and EBRD financing.
105 Digital Partnerships | Shaping Europe’s digital future (europa.eu).
106 Negotiations with Japan have been concluded and are on-going with South Korea and Singapore.
107 For instance, the EU has adopted the EU Foreign Subsidies Regulation, Regulation on the screening of Foreign Direct Investment, the Anti-Coercion instrument, the International Procurement Instrument.
108 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4752.
109 New tools to reinforce the EU’s economic security - European Commission (europa.eu)..
EN EN