May 7, 2024

At the end of April, former Italian Prime Minister Enrico Letta launched a report on the future of the EU’s Single Market, with proposals that should shape the next EU mandate. The report stresses that a fair green and digital transition is a catalyst for a stronger European single market and reaffirms the importance of strengthening a Social Europe.  

Driving Europe’s future: a strong European single market  

In the context of overlapping crises and conflicts, the report sets out Europe’s key challenges: the green and digital transition, the EU enlargement and strengthening defence capabilities.   

For Europe to tackle these challenges, the report calls for a new Single Market strategy capable of leveraging investment to finance Europe’s priorities, speeding up the energy transition and reducing its costs, strengthening the European social model and deepening European integration in defence, telecommunications, transport and health. The report stresses that this strategy should be rooted in a strong Social Europe, based on social dialogue, collective bargaining and good living and working conditions.   

A fair green and digital transition as a catalyst for transformative change 

Letta stresses the paramount importance of meeting Europe’s climate targets. Failure to collectively share the costs of the transition could lead to resistance from various groups and will have economic, environmental and geopolitical consequences. Reminding us of the high costs of inaction on climate change and the urgency of the situation, the report underlines that the transition is an opportunity for industrial leadership and for a more credible EU on the international stage.   

To address these challenges, Letta recommends mobilising private capital through a savings and investment union and creating a European public investment facility to counter instruments such as the US Industrial Reduction Act. This would entail targeted subsidies and support for sectors critical to a fair green transition. In parallel, the report encourages the scale up of circular economy and the development of sustainable transport. 

We need a sustainable and proactive green and social agenda  

The Letta report brings proposals to the forefront of the political debate and is likely to influence the next EU mandate. Progressive actors welcomed the proposals to accelerate the green transition while strengthening the European Social model. Social Platform welcomed the emphasis on social policy and the ETUC praised the need for investment and public procurement. However, WWF pointed out that competitiveness ambitions should be rooted in the European Green Deal. 

Letta’s call for robust investment contrasts with the recently adopted reform of the EU economic governance, which is likely to limit Member States’ fiscal capacity and force budget cuts, jeopardising the continent’s climate, digital, economic and social ambitions.   

In the coming months, European elections will reshuffle the political deck and usher in a new legislature. This report and its proposals should serve as a tool to deliver the green and digital transformation Europe needs in a fair and fully funded way.