Why cities must drive growth in the EU’s single market

This year the EU has commissioned two reports by former Italian prime ministers, Enrico Letta and Mario Draghi, to set out policies to raise Europe’s anaemic growth rate. The long shadow of the financial and euro crises, Covid-19 and the energy price shock after Russia’s invasion of Ukraine have all contributed to the continent’s disappointing economic performance. But so too have several long-standing problems with the EU’s economic structures. Letta has called for ‘more single market’ – deeper internal EU economic integration – as a way to raise competition and productivity. Draghi is likely to do the same when his report comes out in July.
In this paper – which is the first to comprehensively assess the winning and losing subnational regions from trade within the EU – we identify four key facts that policy-makers should consider when pursuing more single market integration.