Celebrating 25 years of the Single Market
Limitless phone calls, jetting off into the sun over the weekend, picking up a bottle of olive oil in a local supermarket – these are all things many of us take for granted today, but which would have been impossible without the European Single Market. The Single European Act (SEA) came into effect 25 years ago. Step by step, small economies across the continent formed into one of the world's most powerful economic areas to which more than half a billion people have access.
The European Single Market, or Internal Market, was to pave the way for economic and monetary union. Its strength lies in what are known as the four freedoms: freedom of movement of goods, capital, services and labour.
Big step for Europe
Looking back reveals what a big step the Single Market was in the history of European integration: Prior to 1993 there were no customs barriers, but Europe was still far from being a unified economic area.
Anyone wanting to study or work abroad usually had to apply for a residence permit. Cross-border services were subject to complicated authorisation procedures, which made it hard for providers of those services. Expensive phone tariffs, rail tickets and airfares, and postage for letters and parcels are just a few examples of everyday life in Europe before 1993. That is why there is good reason to celebrate 25 years of the Single Market.
A union to benefit all
Research shows that hardly anyone loses out from the Single Market: Europe is a global leader when it comes to the economy and prosperity; per capita gross domestic product and labour productivity in EU countries are double the global average.
Germany in particular benefits as a result. According to studies by the KfW, the government-owned development bank, the market for German products has multiplied from a national market worth 2.8 billion euros to a European market worth a total of 14.2 billion euros. And citizens benefit, too: Consumers enjoy greater choice and cheaper prices and employees benefit from diverse new jobs which are open to them.
Thanks to the Customs Union
The Single Market was not created from nothing: It was preceded by the Customs Union, established nearly 50 years ago. With its launch on 1 July 1968, the six founding members – Belgium, Germany, France, Italy, Luxembourg and the Netherlands – facilitated trade and laid the foundations for a strong European economy.
The common rules of the Customs Union:
- No customs duties are levied at internal borders between Member States.
- Imports from other countries are subject to uniform tariff rates.
- The same rules of origin apply to goods imported from other countries.
- Customs values are determined jointly by Member States.