Strengthening the EU internal market in response to fiercer global competition

Recommendations for the European legislative period 2024-2029

Europe's greatest trump card in the world? Its economic strength with its single European market. However, three decades after its inception, it resembles a frayed patchwork of different national rules and laws for goods and services. The consequences are drastic: synergies are not being utilised in the best possible way, companies are investing elsewhere with better conditions to be on the safe side, and Europe is falling behind in the international competition between business locations. The EU internal market must once again become a top priority for the EU. It must become simpler, faster, and more standardised, from the reduction of bureaucracy to a complete banking and capital market union, to a competitiveness check of laws. This will create a competitive advantage and make the European economy resilient to external shocks.

Make the consolidation of the internal market a top political priority for the EU

The completion of the EU internal market in all areas must once again become a central project to guarantee a positive future for the EU. This includes adjustments of the structure and working methods of the European Commission, in particular working towards an overall better coordination.

Align EU legislation in favour of the internal market

The golden rule in EU legislation should be that any new regulation must promote cross-border entrepreneurial activity.

Europeanise national markets

EU member states must quickly open their national markets in line with the European Commission's country-specific recommendations. National sensitivities should no longer be used as a pretext to block the deepening of the internal market. EU member states should always implement EU law precisely.

Penalise inadequate implementation of EU law more heavily

The European Commission must take stronger action against inadequate implementation of EU law in the EU member states. Political considerations should not play a role here. The European Commission should consistently make more use of infringement proceedings to combat breaches of EU law.

Taking account of industry's links to the service economy

The EU member states are called upon to finally implement the EU services directive. The EU should also reform the notification procedure for service-related measures and strengthen the application of the proportionality test. Furthermore, the EU must facilitate the cross-border posting of employees.

Do not reduce the scope of internal market regulations

Some calls to increase the threshold values of the EU directives for public contracts should be rejected, as they would lead to the dismantling of market liberalisation, transparency, and the necessary effective protection of public procurement law. The same applies to demands for extended exemptions and a reduction in legal protection for public procurement.

Consistent application of the New Legislative Framework (NLF)

Thanks to the NLF, products can be freely marketed throughout Europe. However, the inadequate and inconsistent application of the NLF often leads to a lack of coherence in related legislation. This has a negative impact on the industry's chances of placing and marketing products on the European internal market. Only implementation and consistent application can guarantee a functioning, modern and competitive internal market.

Ensure evidence-based legislation

The EU is dependent on better regulation. This can be achieved if every legislative initiative is accompanied by a comprehensive impact assessment. This helps analyse potential economic, environmental, and social impacts on an equal footing and helps examine options for action in a neutral and fact-based manner.

Better consideration of stakeholder positions

Relevant and representative interest groups must be given sufficient opportunities to have a meaningful say in both the drafting and subsequent review of legislative initiatives.

Introduce a competitiveness check

The competitiveness check in EU legislation announced by the European Commission must become an integral part of every impact assessment. It must be applied beyond individual legislative proposals at all levels of EU policymaking and capture the cumulative impact of different policies and regulatory measures on EU competitiveness.

Ensure better regulation throughout the policy cycle

The European Parliament and the Council should carry out supplementary impact assessments on their substantive amendments to Commission proposals. In addition, the EU institutions urgently need to improve transparency in the trialogue negotiations.

Greater control of delegated acts

When drafting delegated acts, legislators should define the scope and conditions of the powers delegated to the European Commission in the basic legislative act more clearly.

Implement the one-in-one-out rule effectively

The one-in-one-out rule (OIOO) is a positive step, but it is not enough to cope with the ever-increasing costs and burdens for businesses. OIOO should not only equalise administrative costs, but also compliance costs.

Priority for the middle class

SMEs and family businesses need to be firmly anchored back on the EU agenda in operational terms, in terms of bureaucratic relief and targeted support. This includes less bureaucracy and better harmonisation of the EU strategies for industry, foreign trade, SMEs, and the Green Deal in implementation.

Secure financial support

The EU Multiannual Financial Framework (MFF) should focus on measures to strengthen entrepreneurial competitiveness. One objective must remain to provide SMEs with low-bureaucracy access to EU funding programmes.

Clearly address the target group

For targeted policy, the financial thresholds of the SME definition should be adjusted considering dramatic price developments. Mid-cap companies should be established as a separate category in addition to SMEs. Operationally, it would be helpful to convincingly fill the role of SME envoy in the European Commission and to utilise it effectively across the services.

Take new geopolitical and trade policy circumstances into account when analysing the market

The European Commission should take a forward-looking view when analysing the market under competition law and take greater account of the global competitive situation, dynamic market developments and the expected potential entry of other companies when defining the market.

Act without new enforcement instruments

There are no structural competition problems or legal loopholes that would justify the creation of new enforcement instruments for the European Commission, for example by revitalising the discussions on the so-called New Competition Tool.

Make antitrust and merger control proceedings proportionate and legally secure

The administrative burden for companies in merger or antitrust proceedings associated with a request for information from the European Commission is considerable. This means that requests for information should always comply with the principle of proportionality. The announced revision of the antitrust procedural regulation must not be at the expense of companies' rights of defence. In the case of planned mergers, companies must be able to predict with legal certainty whether the European Commission will examine the case.

Implement the International Procurement Instrument and Foreign Subsidies Instrument pragmatically

The EU must protect the European industry against distortions of competition caused by the foreclosure of procurement markets in third countries and by unjustified subsidies from third countries for activities in the internal market. New EU instruments, such as the International Procurement Instrument (IPI) and the Foreign Subsidies Instrument (FSI), can play an important role in this respect. However, care must be taken to avoid excessive bureaucracy when applying these instruments.

Evaluate tax compliance obligations

The EU has created numerous new tax compliance obligations for companies, which lead to an enormous administrative burden and should be urgently evaluated, standardised, and reduced.

Develop an overall concept for growth-friendly corporate taxation

The EU should take the entry into force of the global minimum tax from 1 January 2024 as an opportunity to develop an overall concept for corporate taxation, evaluate existing anti-abuse provisions and remove unnecessary provisions. To facilitate cross-border business, tax simplifications must be focussed on more than before. This also applies to the proposed directive presented on 12 September 2023 for the introduction of an EU-wide, common corporate tax system (BEFIT, Business in Europe: Framework for Income Taxation). The possibility of cross-border loss offsetting provided for in the proposal would be an important element in promoting economic activity across borders and lead to growth and employment in Europe. However, given the highly complex nature of European tax law, it is imperative that the BEFIT initiative is simplified and harmonised with the global minimum tax and special national regulations, such as the German trade tax, to avoid inconsistencies and new complexities. The BDI also rejects a binding introduction of BEFIT.

Regulate cross-border mobile working with legal certainty

The EU should work with international partners such as the OECD on legally secure regulations to resolve the tax issues of mobile working in a cross-border context for companies and employees.

Ambitious revision of the CT Directive

The EU institutions should clarify the provisions of the directive on the promotion of investments in combined transport (CT) transhipment facilities to avoid special national approaches. However, more harmonisations must not come at the expense of ambitious regulations: The privileges and attractiveness of CT must not be jeopardised.

Fill the European mobility strategy for rail with life

The industry supports the goal set out in the European mobility strategy of shifting transport to the railways. To achieve this goal and relieve the pressure on the European rail network, which is crucial for industrial production, small and medium-sized capacity-effective measures, such as additional switches and tracks, are crucial. It is also important to secure and strengthen single wagonload transport throughout Europe by introducing Digital Automatic Coupling (DAC). Moreover, bundling existing initiatives also requires a broad-based, market-orientated DAC investment and migration strategy coordinated at European level. Additional measures are also required to optimise the management and coordination of infrastructure capacities. Also, the EU institutions should create the infrastructural conditions for the continuous operability of 740-metre trains on the European rail network.

Utilise the optimisation potential of flight guidance management

The implementation of the Single European Sky (SES) can not only lead to climate-optimised flight routes and fuel savings, but also create additional capacity in the European airspace. The ambitious further development of the SES must therefore remain a priority.