While the prices of goods in the EU internal market have already leveled out, there are still major differences in services.
(Photo: IMAGO/photothek)
Berlin The EU internal market should increase prosperity and ensure relatively equal living conditions. This year the common economic area turned 30 years old.
The German Economic Institute took the birthday as an opportunity to examine whether the countries have grown closer together economically and whether living conditions in Europe have actually converged.
The result is mixed: “Economic integration in the European Union (EU) has increased during this time,” says the study. But there are still many obstacles to the free movement of goods.
This is particularly reflected in the different price levels in the EU countries. Life is therefore the most expensive in Ireland.
That’s where the prices were 44 percent above the EU average. In comparison, the price level in Romania was 45 percent below the EU average. So, living in Ireland is 2.6 times more expensive than in Romania. Denmark is the second most expensive place to live, followed by Luxembourg and Sweden.
Building houses in Germany is particularly expensive
In Germany, prices are 7.8 percent above the EU average, putting the Federal Republic in ninth place among all EU countries in the “expensive ranking”. In Germany, building in particular is expensive, here prices are 42.1 percent above the EU average, only in Sweden is it more expensive to build a house.
The price differences between EU countries are particularly large for messaging via SMS or WhatsApp, for tobacco products, for housing, electricity, gas and other fuels, and for healthcare.
The differences in capital goods are smaller. Here the price range between the most expensive country (Sweden) and the cheapest (Croatia) is only 1.9 times.
While the prices for goods have already adjusted relatively well, “this is not the case for services,” writes study author Berthold Busch. “There still seems to be too many restrictions on competition here.” The regulation of services is still nationally fragmented, and the member states use the existing leeway.
This finding is consistent with other relevant studies. According to this, the cross-border provision of services is still largely underdeveloped. The Services Directive of 2006 did not have the hoped-for liberalization effect either.
The EU itself is partly responsible for cross-border services encountering obstacles. Due to EU law, a certificate is also required for short-term business trips stating that the posted worker is socially insured.
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