Transport as a Catalyst for the EU Single Market

In 1993, the European Union officially opened the single European market (SEM), and for the last 31 years it has focused its efforts on completing it.

Transport in Europe

Starting with the establishment of the Rome Treaty in 1957, transport has been a key in ensuring the economic development of Europe. The fundamental freedoms of the free movement of goods, people and services are ensured by transport. Article 9 of the Treaty of Rome entails a fundamental role of rail, maritime and air transport in moving goods from one country to another. One can observe in Article 48 the role of transnational transport in allowing migrants to move to another state to work. This has now developed in many forms, for instance by enlarging the catchment area of urban nodes to consider commuter workers. At the same time, Article 59 of the treaty of Rome may have spurred the liberalisation of transport, entailing that services should be freely provided across the EEC. However, transport policy has evolved since then. The Treaty on the Functioning of the European Union (TFEU) collects together the development of transport policies, which are a matter of shared competence among the member states (MSs) and the EU (Article 4 TFEU).

The SEM is an area without internal frontiers (article 26 TFEU) and its objectives are to guarantee that goods, services, people and capital can freely move throughout the EU territory. The quality of goods and services is higher as competition and trade are promoted. As a result, consumers have more choices at an affordable price as services can cross borders. This translates into higher quality of life for EU citizens. Via modes of transport people can freely move within Europe to travel, reside and work in a different country than that of their residence. Public transport in particular enables people to participate in the social, economic and political life of their community. It gives dignity and independence to those with reduced mobility and opportunities to those with less financial freedom. However, there are limitations to the SEM. While some sectors have advanced in the liberalisation of services, others like transport still lag behind. In April 2021, the SEM programme for 2021-2027 was adopted with a total budget of €4.2 billion, and its objectives consisted in increasing the effectiveness of the single market and supporting the competitiveness of EU businesses while also promoting sustainable aims and consumer protection.¹

Roadmap to a Single European Transport Area

Building on TFEU advances, in 2011 the European Commission published a white paper entitled ‘Roadmap to a Single European Transport Area,’ which reiterated the role of transport in ensuring that European regions are competitively integrated.² This followed the lines of the Trans-European Transport Network (TEN-T), in which the establishment of a strong multimodal network would mean cohesion among regions and would allow citizens to access remote and rural areas. In a nutshell, the TEN-T ensures that people have access to goods, services and jobs while it strengthens territorial, social and economic cohesion. Although the Single European Transport Area is a work in progress, gradual completion of the TEN-T is happening. By 2030, the core infrastructure network should be completed, whereas in 2040 the extended network will be finalised and in 2050 the comprehensive network. However, the speed of completion of the network is threatened by different rates of development in different MSs and by already developed infrastructure. For instance, road infrastructure is more highly developed than rail and inland waterway infrastructure. However, the offer of services for road passenger transport is limited to the national level as operators are often restricted to operating in one country. There are many hiccups in providing services such as long-distance coaches, cross-border car rentals and charging infrastructure for zero-emissions vehicles.³ In 2022, the transport industry accounted for about 5.2% of total gross value added and employed around 10.5 million persons.⁴

Air transport

Air transport is vital to sustain the SEM. Data show that the sector is experiencing constant growth. Each year over 900 million passengers travel to, from and within the European Union. Europe accounts for a third of the global aviation market. The size of the European aviation market is estimated to be EUR 64.43 billion in 2024.⁵ This makes the sector a key contributor to EU GDP. EU air transport is the most successful case of liberalisation of transport in Europe. If one compares the air sector to the rail sector, it is evident that the latter was subject to delayed standardisation in regulatory, operational and technical terms. This is due to the fact that the rail industry was mostly a national matter rather than a European one. Until 2006 transport services faced barriers. The European Parliament adopted numerous directives to make transport services more easily available across the EU but the 2008 financial crisis put the break on reforms. Therefore, to some extent, it is still a national matter, although some advances have been made since then. Moreover, rail has been the mode of public transport par excellence since the first half of the nineteenth century. It also has a strategic value in environmental and military mobility terms. Despite a decline in 2020 due to the pandemic, demand has been steadily rising every year, reaching a new peak of 429 billion pkm in 2023.⁶ Although many advances have been made in the last 25 years, achieving the single European railway area is challenging. Challenges continue to exist, ranging from fragmented markets to legal and technical barriers. If the single market develops in a sustainable and efficient way, then it will be thanks to the rail industry.

Maritime transport

Maritime transport is more important to the EU economy than is often recognised. It ensures territorial continuity by connecting the mainland to islands and peripheral regions. It is also the biggest means of trading, the backbone of EU trade, as it contributes 14% of global GDP and sea transport exceeds all the other transport modes by volume.[1] Already in quiet periods, the efficiency of freight transport is remarkable. Local shops are able to offer goods but avoid overstocking as they can rely on timely deliveries. Transport acts as the middleman between demand and supply. This was particular relevant during the recent crisis, in which the transport sector showed its resilience. Its focal role in managing the supply chain to guarantee that suppliers, retailers and consumers were connected, was evident.

Transport during the pandemic

During the pandemic, a lack of efficient, timely and connected transport would have led millions of people to starve, among other things. Transport demonstrated its pivotal role in ensuring that the supply chain was not interrupted, from the supply of food to the supply of medical devices. It was fundamental. However, some shortcomings appeared and could not be addressed entirely. The European Commission emergency regulatory measures were fundamental in addressing barriers at borders and solving administrative delays. Although transport is essential for the SEM, it needs a robust regulatory framework to sustain it, particularly in crisis moments. The resilience of the transport infrastructure is something that is deemed important, as is shown by the priorities of the next Commission and by both the Draghi and Letta reports. The infrastructure must be resilient in both security and sustainability terms, considering climate change impacts and abrupt events. Furthermore, resilient infrastructure can greatly facilitate modal shifts and so accelerate the achievement of the climate aims for 2030, 2040 and 2050. Regarding safety, connected digitalised transport and transport infrastructure are important. Thanks to digitalisation, the central role of transport can be boosted, and efficiency can spike. However, privacy and cyber security concerns must be addressed.

Tourism

Tourism plays an important role in the European and local economies. Transport is instrumental for tourism to develop. The more connected a city or country is, the more attractive it is for tourists to visit. Digitalisation of transport is a huge boon for tourists and travellers in general. The booking process is simplified. Travellers directly receive their tickets and real-time information on their personal devices. However, it is challenging to benefit from this immediate information if travellers do not have a mobile phone or a functioning internet connection. There is a risk of not having offline alternatives as efficient as the digital ones. It can be challenging for people to access technologies, which does not translate into a benefit for all.

Some might fear over-regulation of modes of transport. However, regulation should not be considered an obstacle; it is often an enabler for transport systems. A multimodal transport system is an initiative with a systematic vision of transport. This will be implemented by the recently amended TEN-T regulation, the aim of which is to have a Europe fully connected by rail, metro, bus and inland waterways, with urban nodes playing a central role. Now Europe has an opportunity to identify and act on aging infrastructure and create digital twins able to monitor the whole network simultaneously. Public-private partnerships are fundamental to make this happen as national and European funding will not be enough. The promotion of a modal shift is vital to reach the decarbonisation goals. Hence, it is true that the SEM is a work in progress, but furthering environmental, digital and infrastructure gaps brings Europe a step closer to its full potential.

After 67 years, the liberalisation of transport is finally happening, and European citizens will soon benefit from a fully connected Europe thanks to the TEN-T project. This makes transport a catalyst of the EU single market. It is difficult to achieve a fully integrated EU transport system due to infrastructure gaps, differing national regulations and environmental concerns. Therefore, when addressing future legislation or amending previous laws, the EU single market must be considered at the same time. Development of one leads to evolution of the other. The single European market is an ongoing and dynamic process based on managing and eliminating trade barriers among countries. The future of the EU requires MSs to commit to facilitating this process.

[1] The EU Maritime Profile, Section 1: overview of the EU maritime economy – EMSA – European Maritime Safety Agency