Enrico Letta rings the alarm bell, will the EU listen this time?

Enrico Letta’s report on the future of the single market comes at a pivotal moment for Europe, as it faces significant political changes with the upcoming European elections and navigates a more conflict-ridden and complex global landscape.

DIGITALEUROPE’s Director-General Cecilia Bonefeld-Dahl said:

“Letta’s report sends an urgent message that Europe needs to step up its tech game before it’s too late.

We’re pleased to see a strong push on digital—less red tape, more coordinated funding, and the need to slow down the law-making machine and focus on implementation.  Let’s also aim high and channel 25% of all EU funds into digital innovation.

We’re also pleased to see our pitch for a new enforcement Commissioner has been taken up. They must be given enough powers to really make a difference.

On the proposed 5th freedom, this could be a game-changer if it can clear up GDPR implementation headaches and unleash data for research. Still, the plan needs more fleshing out.

We urge the Council to implement these recommendations from Letta as part of the new Single Market strategy for the next Commission. We don’t want this report put in a drawer somewhere gathering dust.”.

Going deeper:

To reshape the future of the EU single market, four key areas should be prioritised:

1. Establish a venture capital market: Simplify and unify regulations to establish a robust EU venture capital market. European firms need easier access to funding over €50 million without having to rely on the U.S. market. Letta’s call for a streamlined Capital Markets Union hits the mark—we must stop rerouting European investments through third countries.
2. Untangle the regulatory spaghetti bowl: Streamline EU regulations to boost the data economy. Adopt a single lead authority under the Data Act and enhance coordination. In cybersecurity, establish uniform reporting standards and centralize governance to optimise our cyber expertise.
3. Facilitate investments in Digital Resilience: Prioritize investments in digital innovation to protect Europe’s security and critical infrastructure. Extend the 25% digital funding target to include all areas of the EU budget, like agriculture and defence. Develop tax incentives and direct investments in critical technologies to stay competitive with third countries.
4. Rethink governance: Appoint a dedicated Commissioner to slash EU administrative burdens by 50% and remove cross-border trade barriers, aiming for 30% of SMEs to engage in cross-border trade. Ensure robust political leadership for the Single Market, focusing on effective implementation over new legislation and further reducing regulatory burdens.

Further background:

• DIGITALEUROPE published a comprehensive publication delving into 10 major single market barriers from connectivity to cumbersome AI compliance: The Single Market Love Story.
• DIGITALEUROPE has identified in a previous report several areas where the EU can do more and prepare itself for the future. Succeeding will require a dramatic shift from business as usual.
• DIGITALEUROPE co-signed a letter outlining specific areas where the European Commission must force change in addressing the Single Market. This included clear regulatory recommendations.