The European Union’s internal market, also known as the single market, is where people, goods, services and money can move between EU member states just as they can within the borders of a member state. The mutual recognition of these principles of free movement plays a key role in removing barriers to intra-EU trade. This means that European citizens can live, study, shop, work or retire in any EU member state and have access to a diverse range of products and services across Europe.
According to the Treaty on European Union, the single market is built around the four freedoms: the free movement of persons, goods, services, and capital. The European Commission plays the most important role in enforcing the rules governing the single market, and regulations, directives or decisions taken within the institutional framework of the European Union which prevail over the national legal systems.
The main objectives of current EU policies are to make the European Union a strong and competitive player in the global economy. Meeting the challenges of Europe’s development, reindustrialisation and job creation are priorities that will lead to the achievement of the economic and social ambitions of the member states.
An important step in shaping the policy direction towards defining a global strategy aimed at improving macroeconomic coordination is the “Europe 2020 Strategy” for smart, sustainable and inclusive growth. This represented a long-term decision in terms of growth, competitiveness and job creation. The flagship initiative “An industrial policy fit for the globalisation era” emphasises the idea that, in an era of accelerated globalisation, national sectors and industries are becoming obsolete concepts. Meanwhile, coordinated and tailored European policy responses are needed; the notion of an integrated industrial policy involves harmonizing EU policies in areas such as: competition, trade, innovation and energy, which have a direct impact on the competitiveness of industry.
Timeline of the EU industrial policy advancements
In order to create an economy with a sustainable and competitive industrial foundation, in 2019, the European Council called for a long-term perspective on industrial policy with an emphasis on artificial intelligence, prosperity, and competitiveness in the “Europe 2020 Strategy” sequel. A more effective policy for small and medium-sized businesses, a balanced approach between competitiveness and climate-neutrality, and the prompt removal of any remaining unjustified impediments to the free movement of services in the single market are all necessary for an ambitious EU industrial strategy.
In October 2020, the European Council called for ensuring the level playing field, and a regulatory environment and state aid framework that are conducive to innovation, developing new industrial alliances, stepping up the assistance to the existing important projects of common European interest as well as developing new ones.
In the following years, the EU stressed the importance of an ambitious European industrial policy to make Europe’s economy fit for the green and digital transitions and reduce strategic dependencies, particularly in the most sensitive areas. The European Union had been building a robust and future-proof economy that secured long-term prosperity. The main requirements are a deepened single market and reinforced industrial and trade policies.
In 2023, through the Net-Zero Industry Act, the European Council adopts position to boost technologies for the green transition proposing to scale up manufacturing of clean technologies in the EU. These rules are designed to accelerate progress towards the EU’s 2030 climate and energy targets and transition to climate neutrality, while: boosting the competitiveness of EU industry, creating quality jobs, supporting the EU’s efforts to become energy independent.
In 2024, the European Council adopts conclusions on the future of industrial policy, ”A competitive European industry driving our green, digital and resilient future” which calls for a comprehensive long-term industrial policy strategy with a vision for 2030. The main objectives are the identification of a limited number of strategic priorities in the EU’s in industrial research and innovation policy and designing a European industrial policy in line with the green and digital priorities of the Union, based on evidence-based tools, metrics, market-based principles and core economic forecasts and findings. Also, this year, the Council adopted a regulation on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem, better known as the ’net-zero industry act’. These rules will facilitate the conditions for investments in green technologies by: simplifying permit granting procedures, supporting strategic projects, based on specific criteria contributing to decarbonization, facilitating access to markets for net-zero technological products, defining rules for public incentives, and enhancing the skills of the European workforce.
In 2025, the European Council called for enhancing the Union’s industrial base and strengthening EU competitiveness through: innovation and promoting European technological leadership, deepening the single market, and enhancing the Union’s industrial base.
Most recently, in March 2026, EU leaders launched a ‘One Europe, One Market’ agenda. Aiming at boosting European competitiveness and enhancing the EU’s strategic autonomy and economic security, this agenda identifies a set of concrete measures with ambitious deadlines. It identifies several priority measures regarding fostering Europe’s industrial renewal, accelerating innovation and reducing strategic dependencies: establishing a targeted and proportionate ‘European preference’, measures against strong unfair competition and economic coercion, and a technological sovereignty package.
The ‘One Europe, One Market’ agenda also includes strategic guidance, concrete specific measures and ambitious deadlines to prevent and remove barriers to the four freedoms of the single market and for key strands of actions: deepen and integrate the single market, further simplify rules and reduce administrative burdens, ensure affordable energy and achieve the energy transition, foster Europe’s industrial renewal, innovation and reduce dependencies, and mobilize investment.
The common goal is to promote, in the long term, a strong, diversified and competitive industrial base in the EU, which stimulates economic growth and the creation of quality jobs and, at the same time, encourages less resource-intensive industrial opportunities.
This objective should represent a path towards the reindustrialization of the EU. Moreover, the aforementioned desideratum should be included in all relevant EU policies, with the aim of contributing to the creation of a coherent industrial policy and to the overall impact of the European industrial strategy. This industrial policy must be based on a smart combination of different policy instruments and must be managed through joint actions. Most policies and instruments should aim at the sustainable development of markets and products, revolutionizing the internal mechanisms of companies along the entire supply chain. It is also necessary to improve market conditions, access to finance, capital, human resources, as well as improving skills aimed at promoting the competitiveness of the industry.
The European Union and its transitions to Industry 4.0 and Industry 5.0
The European Union aims to promote, in the long term, a strong, diversified, and competitive industrial base that supports economic growth, creates high-quality jobs, and encourages less resource-intensive industrial opportunities. To achieve these objectives, the EU has embraced the concepts of Industry 4.0 and Industry 5.0 as key drivers of industrial transformation and sustainable development.
The EU does not view Industry 5.0 as a chronological replacement or alternative to 4.0, but rather as an extension of its principles.
By integrating advanced digital technologies, such as AI, IoT, big data analytics, cloud computing, robotics, and automation into manufacturing and industrial processes, Industry 4.0 enables smarter, more efficient, and highly interconnected production systems. Across the European Union, Industry 4.0 is helping companies improve productivity, optimize resource use, reduce operational costs, and enhance their global competitiveness.
Building upon the technological advancements of Industry 4.0, Industry 5.0 introduces a more human-centered and sustainable approach to industrial development. While Industry 4.0 focuses primarily on efficiency and automation, Industry 5.0 emphasizes the collaboration between humans and machines, placing societal well-being, resilience, and environmental sustainability at the core of industrial strategies.
The transition toward Industry 5.0 supports the European Green Deal and the EU’s commitment to achieving climate neutrality. By encouraging circular economy practices, energy-efficient production, and responsible resource management, Industry 5.0 contributes at reducing environmental impacts while fostering innovation and economic growth.
The combined implementation of Industry 4.0 and Industry 5.0 plays a crucial role in supporting the EU’s vision of a strong and diversified industrial base. By integrating advanced technologies with human-centered and sustainable principles, the European Union is shaping an industrial ecosystem that promotes economic prosperity, quality employment, innovation, and environmental responsibility.
Conclusions
Through investments in research, innovation, digital infrastructure, and workforce skills, the European Union seeks to ensure that its industries remain globally competitive while addressing social and environmental challenges – through human-centricity, sustainability, and resilience.
Having regard to the proposals for reindustrialization and enhancing the single market, the EU should rebuild a common and realistic policy based on shared objectives, including all relevant policy levers and effective multi-level governance.
The EU seeks to optimize the single market’s potential by building the required infrastructures, offering a stable, simplified, and predictable regulatory framework that fosters innovation, enhancing citizen mobility as well as work and training opportunities, and integrating the internal market, which significantly boosts industrial competitiveness and determines whether EU citizens and businesses will advance to a higher level of development.