Cécile Philippe, Constantinos Saravakos, Friedhelm Gross, Latchezar Bogdanov, Nicolas Marques, Petar Ganev, Radovan Ďurana  // 28 January 2025

The EPICENTER report, EU WIN: Reviving Europe’s Competitive Edge, analyses the European Union’s declining influence in the global economy, which has fallen from 25.8% in 2004 to 17.6% in 2024. This decline is driven by persistently low growth, demographic challenges, high public debt, and restrictive regulations that undermine competitiveness. Therefore, the report offers a strategic plan to revitalise the EU’s competitiveness and secure its position in the global economy.

The report highlights the pivotal role of the EU Single Market (SM) in fostering economic integration and convergence, particularly in Central and Eastern European (CEE) countries. While the SM has delivered significant benefits, including increased intra-EU trade and rising GDP per capita in newer member states, its potential remains unrealised due to regulatory barriers, limited liberalisation of trade in services, and fragmented capital markets.

Key findings of the report include:

• Regulatory fatigue and growing restrictions in services trade have slowed the SM’s progress.
• High public debt and reliance on pay-as-you-go pensions strain public finances and labour markets, reducing the EU’s competitiveness.
• Excessive bureaucracy and overly prescriptive regulations deter private investment and hinder innovation, particularly in the digital and technology sectors.
• Green subsidies and mandatory ESG frameworks distort competition and disproportionately impact SMEs.

The report calls for prioritising the SM through reduced regulatory burdens, liberalised labour and services markets, and streamlined enforcement of EU legislation. It also advocates for a technology-neutral regulatory approach, revising restrictive digital market regulations, and fostering an innovation-friendly environment.