The European Commission"s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) published the "2026 Single Market and Competitiveness Annual Report" on January 30, 2026. The report emphasizes that the competitiveness of the European Union (EU) economy faces significant challenges in the context of geopolitical uncertainties, global trade pressures, and strategic dependencies. Furthermore, it states that the Single Market is the cornerstone of the European economy and that removing internal barriers is critical for growth, resilience, and industrial capacity. The report provides comprehensive assessments of the functioning of the Single Market within four main sections: closing the innovation gap, decarbonizing industry, and reducing strategic dependencies. The analysis, based on 29 key performance indicators (KPIs), indicates that progress has been made in some areas, but that progress remains limited, particularly in areas such as research and development (R&D) investments, private sector investments, and the fragmented regulatory structure in service markets. The report highlights that EU labor productivity is below US levels, R&D spending is lagging behind the 2030 target, and the adoption rate of digital technologies by businesses needs to be increased. The report states that there is a need for joint action to remove the ten most important barriers (terrible ten) in the Single Market at both European and national levels; to this end, the first annual Single Market Implementation Agenda is introduced to reduce administrative burdens. The first section, entitled “A Functioning Single Market,” states that ongoing barriers at national and European levels prevent the full utilization of the Single Market’s economic potential. While it is noted that the Single Market contributes 3–4 percent annually to EU GDP and creates millions of jobs, it is observed that integration in goods trade has stagnated and growth in services trade remains limited. This situation is considered to stem particularly from divergence in national regulations, slowness in standard-setting processes, and inadequacies in product conformity checks. Furthermore, it is stated that the current framework in the field of public procurement presents a fragmented view due to the inclusion of numerous sectoral savings, which creates uncertainty and differences in implementation for both public authorities and companies participating in tenders. The second section, entitled “Closing the Innovation Gap,” reveals that despite the EU’s strong universities and qualified workforce, it faces the risk of falling behind its global competitors in the innovation race. It is stated that the share of R&D expenditures in GDP has long been below the targeted level and that private sector investments are insufficient. The slow pace of adoption of digital technologies is considered one of the main factors limiting productivity increases and scaling, especially for SMEs. It is emphasized that if these trends continue, the EU’s technological independence and global competitiveness may weaken. The third section, entitled “Decarbonization of Industry and Investment,” states that high energy prices and weak private investment appetite negatively affect the competitiveness of EU industry. It is stated that the electrification rate has not increased for a long time, but renewable energy capacity continues to expand. Public investments and EU-level financing instruments support industrial transformation, but the fragmentation in the regulatory space within the Single Market makes it difficult to achieve circular economy goals. In this context, it is emphasized that the development of secondary raw material markets remains limited and dependence on third countries continues. In the fourth chapter, titled "Enhancing Security and Reducing Dependencies," it is stated that fundamental changes in the global trade structure have made strategic vulnerabilities in the EU"s supply chains more visible. It is stated that the EU generally maintains its share in global trade, but the manufacturing industry, in particular, is under increasing pressure due to excess capacity in third countries, state subsidies, and additional customs duties. It is noted that the EU maintains its strong position in the context of global trade, but external dependencies in strategic supply chains remain at a high level. The report highlights the risks of external dependence, particularly in critical raw materials and clean technology components, and states that new policy tools are being developed to strengthen industrial capacity. In this context, the Industrial Accelerator Act aims to increase resilience by creating leading markets for manufacturing in Europe, protecting quality-oriented employment, and strengthening domestic production capacity in strategic sectors. In the overall assessment of the report, it is emphasized that the Single Market acts as a "shock absorber" for the European economy and that removing the remaining structural barriers is essential for Europe"s long-term prosperity and strategic autonomy. The report also states that public procurement has become one of the key policy tools used by many global actors to increase supply chain resilience; and that for the EU, simplifying public procurement and aligning it with strategic goals is considered an important leverage in reducing dependencies on third countries. Regarding this issue, Executive Vice-President for Welfare and Industrial Strategy, Stéphane Séjourné, stressed that a number of steps have already been taken to address the challenges identified in the report and to unlock the full potential of the Single Market; at this stage, the EU and member states must act decisively to remove obstacles and implement the Single Market Strategy. The Report in question is supported by a number of supplementary documents, including the “Commission Services Working Paper” (KPIs; Implementation tables; Overview of resilience measures taken by selected global actors), the “2026 interactive online Single Market and Competitiveness Scoreboard” and the “2024–2025 Single Market Implementation Task Force Annual Report”, as well as the Commission statement on the subject, which can be accessed via the following link:

https://ec.europa.eu/commission/presscorner/detail/en/ip_26_252

Furthermore On the other hand, it is noteworthy that the aforementioned “Commission Services Working Paper” includes an examination of the industrial, trade, finance and public procurement policies and international collaborations implemented by the EU’s main partners to reduce their strategic dependencies and make their supply chains more resilient within the scope of green and digital transformation, and that our country is not included in this scope.