Alberto Mingardi // 30 July 2025

Medice, cura te ipsum. The unintended, but so far most relevant, consequence of Trumpian protectionism has been to make us realise that protectionism does not suit us. We should take the next step and recognise that national and European restrictions on economic activity – everything that makes it more unlikely that certain transactions take place – reduce the cruising speed of our economy.

Mario Draghi spoke about this when discussing the EU’s ‘internal tariffs’. The formulaic phrase ‘completing the single market’ is often used. Many are puzzled: Is Europe not already a single market? Economist Luis Garicano (now at the London School of Economics) addressed this question on his blog. There are no tariffs, of course, between France and Ireland or between Italy and Portugal, and that already is no small feat. Countries that use the euro also have another advantage: Since they use the same currency, it is easier for people (whether they are travelling for tourism or business or have a business or family in another eurozone state) to judge where to buy a certain good or service. Yet, “actual trade between EU countries is less than half that between the states that make up the United States”.

Why? Wasn’t the European Union designed to allow easier exchanges between member states? Garicano provides three answers. First, the principle of mutual recognition is not applied. Second, European directives "harmonise" far less than they appear to. Third, the European Commission, whose job it should be to sanction violations of the single market, does not do so.

The mutual recognition principle is founded on the historic Cassis de Dijon ruling of 1979. The Germans argued that for a ‘liqueur’ to be named such, it had to contain at least 25% alcohol. The French Cassis de Dijon contained only 15–20%. The Strasbourg Court ruled that Germany could not block imports just because the drink fell outside German nomenclature rules. If a product complies with the rules of the European country where it is manufactured, it can also be marketed in other countries, even where laws and regulations stipulate otherwise – this is the principle derived here.

If we strictly adhered to the principle, then, the single market would exist and would also be accompanied by genuine regulatory competition: states would learn from each other how best to regulate this or that production. But this is not actually practised.

As Garicano recalls, for instance, ‘Denmark blocked some Kellogg’s cereals because the addition of iron, calcium, folic acid and vitamin B6 “could be toxic” to children and pregnant women. These products were "legal and widely consumed in all other EU states’. Not too different is the situation where Spain and Italy have, for 30 years, fought Cadbury’s Dairy Milk, preventing its sale unless it bore the stigmatising label of “chocolate substitute” because it contained "up to 5% vegetable fat".

Brussels should remedy these problems by harmonising the laws in the member states. The textbook response suggests that if the liberal solution (mutual recognition) proves insufficient, then strong methods of dirigisme must be resorted to. However, this increases regulatory complexity without solving the problem. “First”, explains Garicano, “instead of replacing national regulations, EU rules overlap with them”. Moreover, the states, in transposing them, devote themselves to “adding further national requirements in the implementation of EU directives”.

According to Article 17 of the Treaty, the Commission "shall ensure that the Treaties and the measures taken by the institutions pursuant thereto are applied". It shall also "ensure the application of Union law under the supervision of the Court of Justice of the European Union". Is there a judge in Brussels who will take this up?

For a time, the Commission did do this, and we all remember moments of great tension, precisely on this battlefield, between Brussels and the EU member states. For some years now, however, the Commission has been doing many things, many more than before, but it no longer undertakes this harmonisation.

In December 2024, only 658 single market infringement cases were pending, 16% less than the previous year and 21% less than in 2020. In the previous 12 months, the Commission opened only 173 new cases, a quarter of the volume handled a decade ago. The annual enforcement report for 2023 shows only 529 new infringement proceedings in all sectors, down from 1,347 in 2013. An analysis by the Financial Times found that formal actions for infringement of EU law brought by the Commission against EU countries fell by 80% in the first three years of the Von der Leyen Commission.

The Von der Leyen Commission has frequently exceeded the bounds of the treaties. Part of its narrative is precisely that contemporary Europe is different from the Europe that the treaties and practices of the past three decades designed (it must, for instance, deal with international policy and defence, which nobody has delegated to it).

Can this Commission be credible and effective at removing internal tariffs? It is unlikely.

Yet, disregarding the importance of intra-EU free trade is not just an ideological issue. It is also the result of pressure from interest groups – which can also undermine free trade treaties with other countries.

Alberto Mingardi is the Director General of Istituto Bruno Leoni. This article was originally published by the Istituto Bruno Leoni in Italian.