OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
Priorities for completing the European Union’s Single Market
The EU Single Market remains far from completed: progress in goods and services market integration has stalled, financial markets are still fragmented along national lines and the barriers to labour mobility remain high. Restrictive regulation within countries and regulatory heterogeneity across them hamper the internal market, reducing trade and investment flows. Network sectors, such as energy and transportation, are insufficiently interconnected and open to competition, and inefficient as a result. Reinvigorating the single market is one of the key tools to strengthen the recovery of the European Union and restore faster growth of income per capita.
To support the recovery, structural reforms that yield short-run as well as long-run gains should be prioritised. Policies enhancing labour and capital mobility are especially relevant, as they provide channels of adjustment to country-specific shocks and reinforce the effectiveness of stabilisation policies. Policies enhancing capital mobility include improved securitisation, better collection and sharing of credit information regarding smaller firms and the convergence of insolvency regimes. Labour mobility within the European Union would profit from reduced administrative and regulatory burden, such as faster recognition of professional qualifications and better portability of social and pension rights. Product markets reforms also have the potential to deliver benefits swiftly, not least by unlocking investment. Regulatory burdens could be alleviated by better impact assessment for legislative proposals and ex post evaluation of policies. Product market reforms in network sectors should include harmonisation of regulations and technical specifications, with the target of establishing single EU regulators.
This Working Paper relates to the 2016 OECD Economic Survey of the European Union
Keywords: economic integration, Capital Markets Union, EU single market, labour migration, non-bank financial institutions
F36: International Economics / International Finance / Financial Aspects of Economic Integration;
F15: International Economics / Trade / Economic Integration;
F22: International Economics / International Factor Movements and International Business / International Migration;
L88: Industrial Organization / Industry Studies: Services / Industry Studies: Services: Government Policy;
L51: Industrial Organization / Regulation and Industrial Policy / Economics of Regulation;
G23: Financial Economics / Financial Institutions and Services / Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors;
L98: Industrial Organization / Industry Studies: Transportation and Utilities / Industry Studies: Utilities and Transportation: Government Policy