Single Market Emergency Instrument: A Tool with Pitfalls

The dirigiste interventions in the market it enables warrant critical review, while better coordination and information exchange between the member states could be an added value
of the Single Market Emergency Instrument.

The Single Market of the European Union (EU) is a signifi cant achievement for member states and their citizens. The European Commission (2022a, 1) even describes it as the backbone of the Union’s growth and economic well-being. Consumers benefi t from the Single Market through more choice, better supply security and lower prices. Thanks to the Single Market, business models can be scaled up better and research eff orts can be bundled, and this benefi ts companies (Busch, 2013; Busch and Matthes, 2020). This makes investments in any member state more attractive, thereby reducing the dependence on third countries. The Single Market also improves the negotiating position of the member states under the auspices of the EU, especially in international negotiations in trade and economic cooperation. However, for all the benefi ts achieved, it must be noted that the potential of the Single Market has not yet been fully exploited (Handler, 2022; European Commission, 2020) and the EU has fallen behind in competition with the USA and China in recent years (Bardt et al., 2022). In addition, border closures and other measures between member states at the onset of the COVID-19 pandemic in 2020 demonstrated that the Single Market is vulnerable and should not be taken for granted. Disrupted supply chains, lack of supply of some goods and services, and restrictions of the free movement of workers were the result. The war in Ukraine and the sanctions against Russia as well as the countersanctions have additionally shown that while the European Union is quite capable of cooperating in crises, the Union is still dependent on the supply of some goods from third countries.