Well-functioning product markets play a fundamental role in delivering the higher economic growth and better jobs needed to improve living and working conditions for EU citizens.
Product markets cover the goods and services that people and businesses sell and buy; for example, food from supermarkets, stationery supplies for a government office, or stocks of spare car parts for a garage. Well-functioning product markets ensure that EU consumers benefit from lower prices and a wider choice of goods and services by guaranteeing increased competition, which leads companies to cut their production costs, increase their output and lower their prices. They also favour the entry of new companies with new products or brands to bring onto the market, and boost the incentives for all firms to innovate and create new goods or services.
Stronger competition also makes resource allocation more efficient and increases the incentives for companies to improve their competitiveness and productivity. In addition, it benefits them by encouraging a wider choice of suppliers and distributors and by ensuring that they can buy their raw materials at lower costs.
Better-integrated markets give companies access to a substantially larger market than their own domestic market. This provides them with more opportunities for expansion. More competitive and better-integrated product markets can also help increase the speed of adjustment and resilience to economic shocks, thus limiting the impact of such shocks on growth and employment.
Better education and skills, investment in R&D and incentives to innovation are key areas of the Lisbon Agenda for growth and jobs, and are critical to raising the productivity and competitiveness of the EU economy. In these areas, DG ECFIN's work aims to better integrate education, R&D and innovation policies into the broader economic framework.
The role of DG ECFIN
DG ECFIN is involved in analysing and monitoring the functioning of product markets in three interdependent areas:
This work aims at understanding productivity and competitiveness developments and identifying problems in the functioning of markets.
Promoting competitiveness and productivity growth is at the top of the Commission's agenda since it is fundamental to assuring that the EU economy adequately meets the challenges of an ageing population and an increasingly globalised world in which technological progress is continuously accelerating.
DG ECFIN closely monitors the competitiveness performance of the EU economy and of the different Member States, analyses their performance in terms of productivity, innovation, prices and costs, trade and foreign direct investment, and investigates which reforms have a key impact.