Former Italian Prime Minister Enrico Letta presented his report on the internal market to the EU-27 in Brussels on the morning of Thursday, April 18. For eight months, he traveled across the European Union (EU), meeting with all European heads of state and government, as well as business leaders, civil society representatives and intellectuals.
A minority of companies and citizens in Europe – the most cosmopolitan, the most educated – benefit from the advantages of the internal market, whereas in the United States or China, economic players invest their entire market. Take our SMEs: only 17% of them profit from it. And only three million Europeans work in a country other than their own. This weakness has repercussions on growth and partly explains why the EU has fallen behind the US and China.
They take very little advantage of the economies of scale offered by the domestic market. In three sectors in particular [energy, telecoms and financial markets], the internal market is inexistent. When Jacques Delors created the internal market nearly 40 years ago, the member states wanted them excluded. Today, we are missing the boat in these areas because of market fragmentation.
Let me give you an example. A Chinese telecom operator today has on average, 467 million customers, an American 107 million and a European... five million! In Europe, there are over 100 telecom operators, and the market has been divided into 27 – it's an industrial disaster.
The internal market is very 20th century. When it was conceived, the great European countries were the great countries of the world. To continue with the telecoms example, in the 1980s and 1990s, Europeans were at the forefront of innovation. Today, this is no longer the case. That is why, I believe, we need to create a fifth freedom for research, innovation and skills, alongside the four freedoms of movement, goods, services, capital and people in the internal market.
What's more, competition rules in strategic sectors such as telecoms, energy and financial markets need to evolve: European antitrust should no longer be based on the state of competition in a single EU country but on the scale of the continent.
It's not a question of copying the US model. It's about creating a European Union in these sectors, protecting the consumer, not 27 countries side by side. In telecoms, it's not a question of having three operators as in the US, but perhaps 20 or so.
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