Spain, at Your Service

This blog post is based on an article published in El País on the 5th of October 2025. The original article can be found here.

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In her latest State of the Union address, European Commission President Ursula von der Leyen unveiled a new roadmap for the Single Market. One that, at long last, includes the services sector. For Spain, these policies will help determine the shape of its future prosperity. Madrid must therefore press hard to ensure that the Single Market for services becomes a tangible reality as complete and integrated as that for capital, goods and people.

The reason becomes clear when one looks at Spain’s economy over the past fifteen years. In 2007, before the property bubble burst, construction accounted for 16 percent of national output. By 2023, that share had fallen to just 7 percent. Over the same period, exports rose from 26 percent to 39 percent of GDP. This transformation has left the Spanish economy on firmer ground, less dependent on a single sector and increasingly driven by exporting firms, which tend to be more productive than the rest.

Businesses and workers have evolved in much the same way. Take Lucía, a young architect from Murcia. After being laid off from a construction firm in 2012, she decided to pursue a master’s degree in business administration. By 2015, she had founded her own firm, offering consultancy services.

In Spain, the sale of financial, IT, engineering and consultancy services has grown rapidly. These exporting firms, large and small alike, are driving the economy forward in two ways. First, they invest in digital technology and create high-value intangibles such as data, software and artificial intelligence applications that underpin their success. Second, the spread of this technology across the Spanish economy brings improvements that foster prosperity and growth.

For these firms to keep prospering – and for Spain’s economy to continue digitalising and creating jobs – they must be able to export their services to large markets. In other words, they need to achieve economies of scale, where efficiency rises with output. This is the secret ingredient of the digital economy. Because most costs are fixed, the cost of production per user falls as the business grows, and the marginal cost between the customer 100,000 and the 100,001 can be close to zero.

That is why Lucía wants to offer her services in Portugal and France. Yet she faces administrative hurdles, slow accreditation processes and regulatory discrepancies between countries that hold her back. And she is far from alone. European service providers, digital and non-digital alike, still find it difficult to operate across borders.

While their counterparts in China or the United States can tap into domestic markets of hundreds of millions of customers, European firms face significant barriers to exporting within the Union itself. If these barriers were expressed as tariffs, they would be equivalent to doubling the final price of a product, an increase of more than 100 percent.

Why? Because there is no true European Single Market for services. A company wishing to sell its digital services across the EU faces 27 different sets of rules, licences and regulators. In Spain alone, the cost of these barriers amounts to around 1.3 percent of net output. Given that the country’s net production is worth €863 billion, that translates into an annual loss of some €11 billion. Money that could otherwise be invested in innovation and jobs.

With a genuine Single Market for services, Lucía’s company could expand across Europe without so much bureaucracy. The same would go for Javier, who sells legal technology software from Galicia to clients across the EU but faces a tangle of differing legal and tax requirements in each country. Or for Elena, who has set up a small renewable-energy consultancy in Burgos yet must rely on local intermediaries in Germany or Italy just to operate there.

Moving towards a genuine Single Market for services is a bet on competitiveness, innovation and the prosperity of all Europeans. For Spain, it is also an opportunity to consolidate its economic transformation and to ensure that talent, ideas and entrepreneurial projects can truly reach their full potential.