Today, the European Commission publishes the 2025 Annual Single Market and Competitiveness Report analyzing the strengths and weaknesses of the EU economy. It provides context for the Competitiveness Compass, an action plan to reignite economic dynamism in Europe.
The report tracks the evolution of 22 key performance indicators, such as integration in the Single Market, Research and Development, expenditure, and electricity prices. These are crucial for assessing the EUs competitiveness, identifying areas requiring special attention, such as completing the Single Market, closing the innovation gap, and reducing dependencies.
The main findings of the report are:
- The competitiveness of the EU economy faces pressure from high energy costs and overcapacities in third countries.
- The Single Market, home to 450 million consumers and 23 million companies, is essential for the EUs long-term competitiveness. However, persistent barriers hinder its full potential. Regulatory burdens are seen as obstacles by two-thirds of companies.
- Europe has stable investment spending, strong research activity, and a large talent pool. However, businesses struggle to scale up, R&D expenditure lags, and digitalization progresses slowly.
- Europe has a strong industrial base, but high energy prices weigh on its competitiveness. Decarbonization of industry and energy systems, as well as circularity, is progressing but needs to accelerate.
- The EU maintains its position as the number one global exporter of services and the second-largest exporter of goods. Nevertheless, strategic dependencies and non-market overcapacities in third countries require careful monitoring.
Background
The Annual Single Market and Competitiveness Report, building on annual reporting introduced by the Commission in 2020, provides crucial analysis informing evidence-based discussions in the European Parliament, the European Council, and the Council.
The 2025 report responds to the March 2023 European Councils request to monitor the state of Europes Single Market and competitiveness. It builds on the previous 2024 Annual Report and tracks the competitiveness drivers identified in the EUs 2023 Long-term Competitiveness Communication.
This years findings will guide policy development to strengthen the EUs competitiveness and unlock the full potential of the Single Market. It will notably inform forthcoming initiatives such as the Clean Industrial Deal and the Single Market Strategy.
Additionally, the Commission is today publishing several documents complementing the Annual Report, such as the 2025 Single Market and Competitiveness Scoreboard; a report on key findings from the European Monitor of Industrial Ecosystems; the new Single Market Enforcement Taskforce (SMET) report; and a Single Market economic brief on the External Vulnerability Index (EXVI).
For More Information
2025 Annual Single Market and Competitiveness Report
2025 Single Market and Competitiveness Scoreboard
Single Market Enforcement Taskforce (SMET) report
Single Market economic brief on the External Vulnerability Index