The Single Market is only as simple as its Member States make it
Blog
14 Oct 2026
simplification
Malte Lohan
CEO, AmChamEU

This blog is authored by Malte Lohan, CEO, AmCham EU.

What exactly is ‘single’ about a market where the same product needs different national markings, a cyber incident can require dozens of reports and a professional qualification may stop being recognised at the border?

These examples come from different sectors, but they point to the same contradiction. The EU creates common rules, yet companies still encounter national requirements that divide Europe into separate markets in practice.

The stakes are high for American companies invested in Europe. The United States is the largest single source of inward foreign direct investment (FDI) into the EU. In 2025, American companies invested more in Europe (53%) than they did the rest of the world combined. This has been the case for decades. Much of this appeal lies in the promise of a large, prosperous Single Market.

Yet there are signs that this position is coming under pressure. While Europe remains the leading destination for US investment, its share of total US outward FDI has fallen to its lowest level in more than four decades. More recent indicators point in the same direction too. EY’s 2026 European Investment Monitor found that 943 US companies invested in Europe last year, 16% below the annual average of 1,124 over the previous five years. To reverse these trends, Europe needs to make itself a more attractive place to invest, beginning with a more integrated Single Market.

That is why the simplification agenda cannot lose steam – in Brussels and national capitals. In her September State of the Union address, European Commission President Ursula von der Leyen highlighted the need for EU-wide coordination. ‘Simplification cannot be a one-way street’, she said. ‘All levels have to have skin in the game’.

As EU leaders check in on progress under the ‘One Europe, One Market’ roadmap at this week’s European Council meeting, they should look closely at how national choices affect companies operating across borders. That means addressing three related but distinct problems: gold-plating, uneven implementation and the national barriers that continue to fragment the Single Market.

Gold-plating: when common rules gain national layers

One problem that is gaining more and more prominence is gold-plating: when Member States introduce a wider scope or more burdensome procedures on top of the harmonised baseline an EU act requires.

These additions are not necessarily unlawful, and legitimate national discretion of course sometimes makes sense. In fact, for companies, the problem is rarely one national addition on its own. It is instead the patchwork of repeated compliance processes that emerges when companies must accommodate different requirements across the EU.

Take the General Data Protection Regulation. Despite being a directly applicable regulation, national measures have created different requirements around data protection officers, employee data, digital consent and sanctions. Identical processing can therefore carry different obligations and risks depending on the country.

For companies, that means no genuinely group-wide governance model, no uniform HR policy and country-specific assessments for the same activity.

The Packaging and Packaging Waste Regulation tells a similar story. National labelling codes, documentation requirements, reuse systems and recycling targets can coexist with, or go beyond, the harmonised framework. Country-specific packaging and markings prevent a standard European solution, fragmenting production and logistics.

The Single Market promises scale. These national additions take it away.

Member States should therefore start from the position that gold-plating is a last resort. Any departure from the harmonised EU framework should face a high bar, with governments required to demonstrate that the benefits clearly outweigh the resulting burden. Common definitions, templates and methodologies should be the default wherever divergence creates cross-border complexity.

This discipline must also be preventative. The Public Procurement Act, for example, is a live file where Member States will need to be disciplined to avoid divergent transposition. Guidance is needed before 27 systems become embedded, not after companies have built processes around them.

One obligation, multiple processes

And it’s not just extra requirements that create complexity. The same obligation can also become burdensome when every national authority administers it differently.

A cybersecurity incident does not respect national borders. Its reporting process, however, still does.

Under NIS2, companies can face different registration portals and deadlines. Requirements to register separately in each Member State undermine the objective of a European Single Entry Point.

The problem grows when one incident triggers reporting under NIS2, the GDPR and the Digital Operational Resilience Act. Different authorities may request overlapping information through separate systems and against different timelines. A single incident can generate dozens of reports.

At precisely the moment cybersecurity teams should be containing the threat and restoring operations, specialists must translate the same facts into multiple administrative formats. More reporting does not automatically mean better cybersecurity – sometimes, quite the opposite.

Tax administration presents a similar problem. Common or related obligations can involve different national registration procedures, data fields, classifications and deadlines. Information already held by one authority may have to be collected and submitted again elsewhere.

The principle should be simple: report once. Authorities should reuse information companies have already provided, align data requirements and make national and European systems interoperable. Where obligations overlap, companies need one reporting point and a clear lead authority.

National systems in a European market

Some of the Single Market’s biggest barriers run deeper still, rooted in legal systems that remain distinctly national. These barriers impede scale.

Capital markets are a prime example. Financial activity is increasingly cross-border, but supervision and infrastructure remain fragmented. Operators may need separate structures and supervisory relationships in different Member States, while differences in national insolvency law create further uncertainty for investors.

These barriers increase costs and make it harder for European savings to reach promising companies and projects. Europe cannot build deeper capital markets while key parts of its financial architecture remain organised around national borders.

Workers face barriers too. As the Financial Times points out, a master baker – fully qualified in France, for example – will find their qualifications not recognised in Germany. Licensing rules, recognition procedures and pension-portability hurdles continue to make movement between Member States more difficult than they should be in a Single Market.

Full harmonisation will not always be possible. But Member States can apply mutual recognition more consistently, simplify recognition procedures and reassess restrictions that unnecessarily impede mobility. The test should be whether a national requirement is genuinely necessary, not merely whether it has always existed.

National action, European impact

In the end, simplification is not solely a task for the Commission or the European Parliament. Member States determine whether EU legislation works as one framework or fragments into national compliance exercises. They dictate whether information is reported once or repeatedly. And they have the power to dismantle many of the barriers that still obstruct the movement of capital, services and workers throughout the EU.

As Europe’s leaders review the ‘One Europe, One Market’ roadmap, they should treat these responsibilities as central to the entire region’s economic competitiveness. One Europe, One Market cannot mean 27 versions of simplification.

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Gold-plating in practice

"Gold-plating" of EU legislation has become a structural challenge for companies operating across the Single Market. While Member States are often permitted to introduce additional national measures when implementing EU law, these divergences frequently create fragmented compliance requirements, administrative burdens and increased costs for businesses.

Drawing on examples from AmCham EU member companies across digital policy, cybersecurity, data protection, telecommunications, environmental regulation, consumer protection, tax transparency and labour law, the paper shows how national additions to EU rules can result in parallel compliance systems, duplicate reporting obligations, country-specific product adaptations and barriers to cross-border operations.

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  • Divergence between Member States is often a bigger cost driver than any single regulatory requirement.

  • Fragmentation extends beyond directive transposition and also arises through opening clauses, national guidance, administrative practices and regional measures.

  • Minimum-harmonisation legislation can still create significant Single Market fragmentation.

  • Gold-plating occurs at both national and sub-national levels.

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