IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2025-113.html
   My bibliography  Save this paper

Lifting Binding Constraints on Growth in Europe: Actionable Priorities to Deepen the Single Market

Author

Listed:
  • Mr. Nathaniel G Arnold
  • Allan Dizioli
  • Alexandra Fotiou
  • Jan-Martin Frie
  • Ms. Burcu Hacibedel
  • Tara Iyer
  • Ms. Huidan Huidan Lin
  • Mr. Malhar S Nabar
  • Mr. Hui Tong
  • Mr. Frederik G Toscani

Abstract

Focusing on a cross-border perspective, this paper identifies four key binding constraints that hinder firms’ ability to innovate and scale up within the EU single market—fragmented regulations, inefficient financial intermediation, limited labor mobility, and fragmented energy market. To address these constraints and facilitate firms’ cross border scale up, investment and innovation, the paper proposes key action areas for deepening the integration of the single market, including lowering regulatory fragmentation, advancing the capital markets union, enhancing labor mobility within the EU, and integrating the EU energy market. Through illustrative scenarios, the paper highlights that a few actionable steps along these dimensions could lead off the process of deeper integration and deliver a meaningful initial payoff by increasing the EU GDP level relative to baseline by around 3 percent over 10 years—a sizable improvement considering that the EU potential growth is projected to be just above 1 percent annually over this horizon.

Suggested Citation

  • Mr. Nathaniel G Arnold & Allan Dizioli & Alexandra Fotiou & Jan-Martin Frie & Ms. Burcu Hacibedel & Tara Iyer & Ms. Huidan Huidan Lin & Mr. Malhar S Nabar & Mr. Hui Tong & Mr. Frederik G Toscani, 2025. "Lifting Binding Constraints on Growth in Europe: Actionable Priorities to Deepen the Single Market," IMF Working Papers 2025/113, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2025/113
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=567610
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2025/113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.