Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Fewer barriers in the EU single market could increase Danish welfare
The Danish economy has benefited significantly from the EU single market, but considerable potential remains. Despite progress in trade integration, many barriers persist. Model calculations show that reducing internal trade barriers within the EU could substantially increase Danish welfare – and, in some cases, mitigate the negative consequences of global fragmentation. A better-functioning single market could therefore be a key element in securing future growth and stability for the Danish economy.
Key messages
Why is this important?
The EU is Denmark's largest export market. In a time of geopolitical tensions and trade policy uncertainty, the single market is therefore an important source of stability and growth. Further integration could increase trade and welfare, as well as help mitigate the negative consequences of fragmentation in global trade. It is therefore crucial for Danmarks Nationalbank to understand the extent of internal trade barriers in the EU and the effects of deeper integration in the single market in order to support a robust Danish economy and ensure stable prices.
"Europe faces a choice between exit, paralysis, or integration."
Mario Draghi, Former President of the European Central Bank, ECB
Main chart
There is potential for more trade between EU countries
Note:
Before 2017, data for the US is only available for the years 2002, 2007 and 2012. The data covers 27 EU countries and 50 US states, as well as the federal district of Washington D.C.
Source:
Eurostat, US Freight Analysis Framework and own calculations.