EPRS | European Parliamentary Research Service
Author: Elodie Thirion – Graphics: Giulio Sabbati
European Added Value Unit
PE 611.009 - November 2017
EU single market:
Boosting growth and jobs in the EU
• The single market constitutes the largest barrier-free, common economic space in the
industrialised world, encompassing over half a billion citizens in an economy with a gross
domestic product (GDP) of some €13 trillion.
• Since its creation the single market has added 2.2 % to the EU gross domestic product
(GDP), increased employment by 2.8 million, and promoted inward investment into the
EU economy.
• Delivering and completing the existing single market could potentially allow for a
€651 billion additional benefit per year.
The progressive abolition of trade barriers
The EU single market (also known as the internal
market and, originally, the common market) prescribes
free movement from one EU Member State to
another of goods, people, services and capital (known
as the 'four freedoms'). This is implemented by
eliminating barriers so that citizens and companies in
the EU can benefit from direct access to 28 countries
and over 500 million people.
Intra-EU tariffs and trade quotas were progressively
abolished from the 1960s onwards with the creation of
the customs union. While intra-EU tariff barriers were
completely eliminated by 1968, non-tariff barriers
remained – such as divergences in technical regulations, administrative obligations, currency devaluations,
and tax differentials. In 1986, the Single European Act set a deadline to complete the EU single market by the
end of 1992. It helped to revitalise the EU economy, as companies were enabled to operate across national
boundaries − realising both their 'compara ve advantage' and economies of scale − and consumers enjoyed
widening and cheaper choice in increasingly competitive markets.
This process was given additional impetus by the parallel broadening of the market, with its enlargement:
from a Community initially encompassing 170 million people in six Member States in the late 1950s, the
number of EU citizens grew from 345 million in 12 Member States in 1992, to just over 500 million in 28
Member States by 2013. Since the creation of the European Economic Area (EEA) in 1994, the single market
has also included Iceland, Norway and Liechtenstein. The number of companies located within the single
market has risen from 12 million in 1999 to 22 million in 2014, adding up to an increase of 10 million
companies in 15 years.