EU unveils new strategy to unify fragmented single market

The European Commission is set to unveil a renewed strategy on May 21 to strengthen the EU’s single market by removing longstanding national barriers that continue to fragment trade within the bloc.

Nearly four decades after its creation in 1987, the single market remains hampered by a patchwork of national regulations, effectively splitting the EU into 27 distinct markets, Caliber.Az reports per foreign media.

The Commission’s new plan seeks to tackle these inefficiencies through technical measures such as harmonised packaging rules, digitised compliance paperwork, and standardised labelling requirements.

At the core of the proposal is a push to eliminate small but persistent regulatory differences that deter cross-border trade. Brussels will introduce a regulation to standardise packaging and expand the use of the Digital Product Passport—an electronic tool detailing product compliance with EU laws.

A proposed “28th regime” would also allow businesses to launch across the bloc within 48 hours via a single digital process, with legislation expected by early 2026.

According to Commission estimates, even a modest 2.4% rise in intra-EU trade could offset the impact of a 20% decline in US-bound exports caused by tariffs. The strategy builds on calls from recent reports urging deeper integration to enhance the bloc’s global competitiveness.

The plan excludes financial services, which remain largely national and politically sensitive. Instead, reforms in that area will be handled separately under the EU’s savings and investments union.

The Commission is also targeting services, which account for around 75% of EU GDP. Sectors such as construction, consulting, e-commerce and telecoms offer untapped cross-border potential. Construction alone represents over 10% of the EU economy, yet only 1% of its output crosses national borders.

Success hinges on member state cooperation, as many of the barriers originate in national legislation. To ensure alignment, Brussels is urging governments to appoint “high-level Sherpas” within their executive offices to champion the initiative.

A review of the strategy is scheduled for the end of 2026, with a potential Single Market Barriers Prevention Act to follow in 2027. Still, cultural and linguistic diversity across the EU may pose challenges beyond regulatory alignment, underlining the limits of what the Commission can achieve alone.