Is the EU's single market failing? Faced with growing competition from China and the US, the bloc is falling behind. The union has been relying on the single market to guarantee the free movement of goods, capital, services and people for more than 30 years. But inertia is creeping in, and it’s time for a new single market, says our guest Enrico Letta, a former prime minister of Italy, president of the Jacques Delors institute and author of a high-level report on the single market's future. He has just presented the report to EU leaders, after hundreds of meetings in dozens of European cities, in which Letta tried to gauge where the market is delivering for people – and where it isn't.

Letta argues that too many people are not benefiting from the single market, which is "perceived as a great opportunity for big companies but less of an opportunity for small and medium-sized enterprises (SMEs). That's why I put in the report many ideas to help SMEs. The most important of those is a simplification, to avoid having to change legal regime between different countries."

He elaborates: "The cosmopolitan part of our society is very happy with the single market. But there's a large part of society that is less mobile, and thinks that the market is not adapted to them."

The former Italian premier calls for a fifth freedom to be added to the single market, on top of the four founding ones – freedom of goods, services, capital and labour – which would be focused on enhancing research, innovation and education.

"The lack of innovation is one of the reasons why we are lagging behind the US and other parts of the world," Letta explains. "We need to scale up investments and innovation. We need to encourage the circular movement of researchers and scholars in Europe; not only going from east to west and from south to north, as is the case today. The fifth freedom would be a boost for the future of the single market."

Letta says he tried to inject a sense of urgency into his report. "We have to be very fast in introducing the big changes at the European level, at the single market level. Otherwise, inertia means decline for Europe," he says. He takes the example of energy, telecoms and finance.

"The main point is how to integrate the sectors where the single market wasn't integrated until now, because these three sectors – financial markets, energy and telecoms – are the main sectors in terms of competitiveness. And today we are lagging behind because we are not integrated. We are in reality 27 markets, and we are too small to compete with the Chinese and the Americans."

Letta admits that the political hurdles to more integration in those areas are "very big".

"First of all, because of the idea of national sovereignty, which everyone wants to defend," Letta explains. "But in reality, we have to have a European sovereignty on these topics. It's the only way to be economically secure. And the most important part is related to financial services, because today, everything that is finance is going to the US. We are too small; too fragmented and so less competitive. On the integration of the financial market, I propose to launch the Savings and Investments Union, as the only way to finance the green, digital and just transitions. That is the most important choice for the European Union in the coming years."

Programme prepared by Agnès Le Cossec, Paul Guianvarc'h, Perrine Desplats and Isabelle Romero