EU Single Market Report Flags Persistent Gaps for SMEs

The European Commission has published its sixth Annual Single Market and Competitiveness Report, drawing on 29 key performance indicators to assess the state of the EU economy. The picture that emerges is mixed: six indicators have improved, six have deteriorated, and 15 remain broadly stable compared to the previous edition.

One area of particular concern for SMEs is digital adoption. The lagging uptake of digital technologies is most striking among SMEs, and it is estimated that achieving the EU’s digitalisation targets would unlock economic gains equivalent to 1.8% of GDP.

On the regulatory front, the Commission has identified priority areas where it will concentrate its efforts in 2026 to reduce barriers within the Single Market, targeting in particular late payment practices and obstacles affecting key services linked to the green transition.

The report also sets the stage for upcoming legislative action. A proposed “28th regime” for companies — expected in early 2026 — aims to reduce the compliance burden for SMEs, start-ups, and scale-ups, which currently face set-up costs of up to €15,000 per EU Member State when seeking to operate cross-border.

The report is intended to serve as a foundation for policy dialogue between the Commission, the European Parliament, Member States, and the business community throughout 2026.

Read more: The 2026 Annual Single Market and Competitiveness Report – Internal Market, Industry, Entrepreneurship and SMEs