Ministers set the goal for the next Commission: a new internal market strategy by 2025

The final approval by the EU Council paves the way for the new due diligence obligations for large enterprises to enter into force. The directive was finally endorsed by the European Parliament in April and will require Member States a two-year term to be transposed in their national legislations. The law voted by ministers responsible for Competitiveness will affect companies of more than one thousand employees with a turnover of more than 450 million euro. If exceeding this threshold enterprises are called upon to adopt a risk-based system to monitor, prevent or remedy human rights or environmental damages along the chain of their activities. The directive will apply in three, four or five years from the entry into force depending on the size of the companies. The smallest ones will adopt the new rules for last.

The focus during the meeting among ministers was set more broadly on the future of internal market. In a non-binding text of conclusions, largely deferring to former Italian prime minister Enrico Letta report “More than a market”, the 27 delegates urged the Commission to prepare a strategy for a modernized single market before June 2025. A more efficient regulatory framework to be met with the removal of unnecessary administrative burdens was considered by ministers one of the main drivers to harness the single market untapped potential.

The conclusions also call for the prevention of over-regulation, the permanent monitoring of the market situation and for coherent and strong enforcement of existing legislation. The text also stressed on the need to address unfair commercial practices to strengthen consumer protection. 

Asked during the press conference why the European Commission is dwelling to launch a fact-finding mission on Territorial supply complaints, Executive Vice President Margrethe Vestager, said that this depends on the controversial nature of this unfair practice. “When questioned on the scarcity of food in a specific territory or different price levels on two different territories some say this just reflects the divergence in purchasing power”, Vestager claimed. “The renewed focus on this matter is important, because many people do not see the barrier and can doubt on the capability of the single market to deliver in other instances”, she added.

Ministers further adopted conclusions to encourage the next European Commission to identify a limited number of strategic priorities in the EU’s industrial research and innovation policy. “A key task for the next Commission will be to try to bridge the ‘innovation paradox’”, the text reads with reference on instances where knowledge does not always translate to marketable products and services.

The non-binding conclusions highlight also the necessity to boost private and public finance instrument, “while preserving the competition and state aid policies”. “The first thing is to make capital market union work, we are behind the United States on bonds, equity, venture capital”, Vestager told journalists. “But it’s important that we also have EU rules granting small and medium enterprises to get paid on time. “Low hanging fruit that can be harvested if there is political will, self confidence that we can get the job done and speed in doing it”, the Vice President added.

The comprehensive European industrial policy the Commission is asked to adopt should be “in line with the green and digital priorities of the Union”, according to ministers. “Europe’s future industrial policy framework should be based on evidence-based tools, metrics, market-based principles and core economic forecasts and findings”, the text reads. Updated economic results need to be integrated in an industrial policy analysis, and incorporate environmental, sustainability, resilience and social factors into its baseline models. It should also take into consideration “recent legislation such as the chips act, the critical raw materials act and the net-zero industry act”.

The conviction that there is not a trade-off between sustainability and competitiveness was widely widespread among ministers. “The green and the digital transitions are a key driver for building an inclusive society, which is the only possible ground for economic prosperity”, Vestager told journalists.