Building on Enrico Letta’s report on the Single Market, and Mario Draghi’s report on competitiveness, the new Single Market Strategy, presented by the European Commission on 21 May, aims to modernise and simplify the processes within the Single Market to enhance its efficiency. While barriers in the Single Market must be addressed and a level playing field must be created in order to allow industrial and service cooperatives to unlock the full potential of the Single Market, the continued emphasis on increasing competitiveness over democracy at work, quality jobs, environmental sustainability, and social responsibility risks furthering the divide between large commercial enterprises and small and medium cooperatives.

The key pillars of the Strategy include the elimination of barriers that negatively impact trade and investment, enhancing access to the Single Market for SMEs, digitalisation, and prevention of new barriers due to incorrect transposition of EU rules.

Simplification

In particular, the Single Market Strategy highlights the need for simplification and announces upcoming omnibus packages related to overcoming complex EU rules. In line with these efforts, the fourth simplification Omnibus was published alongside the Single Market Strategy, which aims to reduce administrative burden, e.g., by digitising paper-based requirements. While the reduction of bureaucratic burden is welcome, and providing legal clarity can be an effective form of simplification, these efforts should not be to the detriment of the high social, environmental and consumer standards, which the Strategy also reminds exist to protect citizens and enterprises of the EU and are necessary for maintaining the well-functioning of the Single Market. Indeed, administrative burden should be reduced for SMEs, including small and medium cooperatives, however, the efforts detailed in the Strategy often treat all businesses as equal. A notable exception regarding eliminating barriers for SMEs is the announcement that a new mandatory SME check will be put in place and SME-friendly provisions shall be systematically considered. Nevertheless, by emphasising the need for simplification in order to increase competitiveness, disregarding the different barriers for SMEs and large enterprises, the Strategy may contribute to further tilting the playing field toward large commercial enterprises and businesses that put profit over people.

Sustainability

Regarding SMEs, the Strategy also recognises the difficulties they encounter in accessing sustainable finance and in terms of sustainability reporting, where reporting requirements trickle down to SMEs despite these not being obligatory for them. In order to address these, the Commission is looking into developing voluntary approaches to aid SMEs in disclosing their environmental sustainability performance to financial institutions. Moreover, to alleviate the various differing sustainability reporting requirements SMEs receive from their business partners, public administrations and banks, a voluntary standard is being developed for SMEs (VSME). However, more needs to be done for small and medium enterprises, including cooperatives, to thrive in the Single Market, including taking into consideration the cooperative model and highlighting its added value in the reporting schemes.

Although the Strategy emphasises the importance of maintaining climate ambitions and social responsibilities, the actions described in the document do not fully support this goal. For instance, regarding public procurement, the Strategy points out that there is need to simplify the rules so as not to discourage public buyers and enterprises from participating in cross-border tenders. Although simplification is needed in terms of reducing administrative burden on SMEs, including small and medium cooperatives, the aim of these obstacles should be to create a level playing field, and not to reduce the use of crucial environmental and social criteria, as this would ultimately diminish the value of the procured goods or services. Indeed, social responsibility and environmental consciousness are integral parts of the EU and must not be sidelined as the EU prepares to decrease administrative burden to increase its competitiveness.

Business transfers

Recognising the complicated nature of setting up and operating businesses, a welcome element of the Strategy is the recognition that business transfers are an effective way to preserve jobs. Although the Strategy does not mention specifically the transfer of businesses to the employees (under the cooperative model), it announces a revision of the Commission Recommendation on business transfers (Q4 2025). CECOP calls on the Commission to take into account our suggestions to support business transfers, published earlier this year together with other European organisations, and in particular to provide guidance and support for business transfers to the employees under the cooperative form, also known as workers buyouts (WBOs). As detailed in our position on the Single Market Strategy, WBOs are a powerful tool against deindustrialization and ensuring that jobs, skills and know-how are maintained within the EU.

Digital product labels and waste management

In terms of digitalisation, the Strategy calls for a shift from paper-based to data-based processes on the Single Market. In particular, the Digital Product Passport (DPP) is set to become the primary tool for sharing product information. While the DPP will address the fragmented rules for product labels, the Strategy also recognises the lack of harmonisation in terms of waste management. To this end, the Strategy calls for harmonising the Extended Producer Responsibility (EPR) schemes and thus creating a single market for waste. Indeed, the current system for the collection of waste is under pressure, and the different systems set up in Member States also put pressure on cross-border waste management. It is therefore imperative that the Commission solves this issue. In addition, the Commission must recognise the key role social cooperatives play in waste management, reuse and recycling, without whom the system would collapse.

Shortcomings

We regret that the new Single Market Strategy does not mention social economy enterprises, including cooperatives, in spite of their significant contributions to providing environmentally friendly and socially responsible goods and services across the EU, as well as decent jobs and fair wealth redistribution reinforcing regional development. Additionally, the Strategy should have addressed the need for reviewing and adapting State Aid rules to strengthen access for cooperatives and other social economy enterprises, while the General Block Exemption Regulation (GBER) should be adapted to recognise social economy enterprises. These changes to the current rules would enable cooperatives to continue and scale up the provision of services of general interest, particularly in rural/remote areas, while at the same time, their role in work integration of vulnerable people would also be recognised.

Another key point missing from the Single Market Strategy is support and funding for skills development. To unlock the full potential of the Single Market, addressing skills gaps and anticipating skills needs in light of the twin digital and green transitions are essential. However, there is no mention of the role of education and training, and reskilling and upskilling in increasing the efficiency and well-functioning of the Single Market.

Conclusion

Overall, the Single Market Strategy recognises the urgent need for modernisation and addressing barriers that hold it back. However, it appears to favour deregulation and simplification over levelling the playing field for small and medium enterprises, including industrial and service cooperatives. It focuses on ensuring businesses can operate more freely across the EU but does not take into account the workers who need access to quality jobs, education and training. The Strategy hints at the need to meet climate objectives and protecting the European social model, but it nevertheless fails to safeguard, let alone increase the environmental and social standards that are enshrined in the EU Treaties.

 

Read our full position on the Single Market Strategy