Conference report. Thoughts on Enrico Letta’s Single Market Report

On 17th April 2024, Enrico Letta, former President of the Jacques Delors Institute, presented the long-awaited “Much more than a market” report to the Special European Council, composed of EU-27 prime ministers and government representatives. The report makes a case for strategies to deepen, broaden and improve the European Single Market. It presents numerous insightful suggestions across various domains, including health, tax policies, consumer assistance, and both economic and social security, along with military security considerations. It extends beyond the conventional focus on fostering greater competition, acknowledging the European Union's dual challenge of substantive policy formulation and the imperative for a vision that transcends mere competitiveness, while also addressing the crucial issue of garnering public support.
The report makes a wise choice of adopting a substantial approach to policy matters, bypassing the complex discourses that insistently promote Treaty modifications, which tend to obfuscate public understanding and foster the belief that voters have diminished influence on policy matters. However, it retains an apolitical tone, probably likely due to its commissioning by the European Commission. As a political scientist, I am inclined to perceive politics pervasively, and herein lies a fundamental question: how do we navigate from widespread public distrust, and sometimes outright aversion, towards the EU to effecting significant substantive policy changes that inherently demand substantial political integration?
Outlined below are three prospective paths, drawing from broader scholarly work on European integration and policy making: a grand intergovernmental bargain, a coalition comprising transnational interests alongside the Commission, European Parliament, and European Court, and a strategy of politicisation, supported by political parties, movements, and citizens. Each path will be elucidated with its potential workings, key actors, processes, as well as anticipated obstacles.

Inter-governmental Grand Bargains

Grounded in an inter-governmental perspective of EU integration, this approach acknowledges the diverse preferences of national governments regarding both substantive policies and integration levels. Bargains are struck within specific policy domains, such as liberalising rail services while permitting increased subsidies for rail transport, as well as across policy areas, exemplified by support for SMEs alongside the promotion of larger Euro champions.
The advantages of this approach are the recognition of the role of national governments, given their electoral mandates, which ensures that policies are aligned with the democratic choices of their citizens. Additionally, these substantial changes can support the EU policy making, because it provides an avenue to mitigate blame for policy outcomes beyond their control. Furthermore, it leverages the EU's capacity to address collective action challenges effectively and on a sufficient scale, ensuring that member states can collaboratively tackle issues that transcend national boundaries, like coordination and ensuring compliance with regulations and standards.
Nevertheless, we also have to address the problems with the promotion of this path. Some issues appear non-negotiable, such as European defence, against the opposition of pro-Russian governments. Other issues that are close to being zero-sum games, like corporate tax competition, call for delicate negotiations. The Grand Bargain path also raises a major political problem; political incentives drive national governments to claim credit for policy successes, while deflecting blame onto the EU for failures. This was the case during the 2016 Brexit referendum, where many farmers and people living in the EU's regional funding voted to leave. Considering time and capacities is also important, different stages of electoral cycles and different political abilities can determine national government's capacity to agree and influence their partners and parliaments to ratify any deals. The report also raises another issue, the potential for increased opposition if substantial overt policy changes are attempted, whereas more incremental and/or covert integration strategies may have a greater chance of acceptance.

Coalition of Transnational Interests

The second path presented is the coalition of Transnational Interests with the Commission, the European Parliament and the European Court. This strategy aligns with a neo-functionalist view of European integration, emphasising the pivotal role of transnational actors in advocating for reduced cross-border barriers. Large transnational firms, in collaboration with the Commission, segments of the European Parliament, and the European Court of Justice, mobilise to address challenges such as international competition, environmental standards, and unfair subsidies. In the context of intense market competition from China and the US, as seen in the EV industry, international corporations are seeking to access larger markets within Europe. By developing higher environmental standards, European industries face several challenges. One challenge is the risk of biassed standards being imposed by other countries or regions to disadvantage or hinder European exports. Additionally, there may be uncertainty regarding the acceptance and recognition of these higher standards in international trade. To address these challenges, there is a perceived need for protection and coordination at the EU level.
A coalition of transnational interests can put European institutions to central decision making positions, by harnessing the influence of large European firms, as the key market players in international trade and combining it with the legal authority held by the European Commission, the European Court of Justice and the democratic standing of the european parliament. This approach can be taken incrementally, to limit strong opposition.
On the down side, this path risks perpetuating perceptions of EU policies favouring large corporations over ordinary citizens. Policies resulting can be unbalanced and mostly market driven. This strategy also lacks democratic legitimacy, since it’s largely driven by unelected bodies. Without the approval of national governments, substantive action is limited. It runs counter to the report's calls for a more radical approach beyond legalistic and incremental measures, to foster a broader vision.

Politicisation

The third pathway presented to us is politicisation. Contrary to conventional wisdom, politicisation could serve as a means to foster popular support for EU initiatives. While the report remains relatively apolitical, it outlines reforms deemed desirable. Involving more political discourse and competition around EU initiatives and establishing a space for European politics could accommodate diverse policy priorities and trade-offs, encouraging political parties and movements to offer substantive choices.
Politicisation of the European Union allows for a shift in focus towards more substantive policy debates, rather than just integration. By politicising European institutions; genuine opposition can be cultivated, based on policy alternatives and discussions. This aligns with the evolving landscape of pan-European politics, facilitating cross-party alliances.
Nevertheless, politicisation limits the emergence of transnational European political entities. There is also the risk of the persistent dominance of national agendas in European Parliament elections, and the inadequate elite-level discourse on policy choices, that can hinder substantial policy reforms and often offers just one singular possible solution. The real problems of politics in solving the double problem of Europe are the danger of increasingly top-down, seemingly technocratic debates of policy reforms, that in reality lead to a lack of change in substantive policy.

In conclusion, while the Enrico Letta report highlights the imperative for substantive policy changes, it also underscores the pressing need for political engagement to navigate the complexities of EU integration effectively. However, amid these challenges, glimmers of hope emerge, evidenced by the transformative impact of initiatives like Erasmus and evolving attitudes within political spheres, as evidenced by Georgia Meloni’s evolving views on fascism. Britain's decision to exit the EU has served as a cautionary tale for the rest of European countries, inadvertently helping the rest of Europe, as it so often does. Ultimately, as Europe charts its course forward, it must heed the lessons of past successes and failures, embracing a nuanced approach that balances technical expertise with democratic accountability.

This article was written following the CERI-PSIA joint event: "Much More Than A Single Market?" that took place on 13 May 2025. Find out more about the Conference