Europe as an opportunity: single market strengthens export business

Disputes around US tariffs and the response to this around the world are unsettling companies and consumers – and threatening to put the brakes on global economic growth. Everyone is speaking of chaos and uncertainty, including in the world of business, as many companies have close ties with the US market. One thing is clear: a decline in prosperity will also leave its mark on the European Union, as its foreign trade is strongly oriented towards the US market.

One way for the EU to compensate for losses in US trade is to further develop the single market. Project and export finance also offer opportunities.

With a total of around 440 million consumers, the European single market harbours significant economic potential. As an economic area that allows free trade in goods and services without any tariff barriers, the EU market is a guaranteed source of growth and prosperity. It is particularly important as a sales market for the export nation Germany: in 2023, 55% of all German exports went to EU countries.

According to a study by the consultancy firm Deloitte from March this year, the EU single market would even be able to compensate for the losses incurred in US trade as a result of the new tariffs, provided that existing barriers to trade in the EU are halved. Trade barriers have a similar effect to tariffs and result primarily from different legal practices, regulatory requirements and provisions. Experts say that if these trade barriers were halved, German exports could grow by 1% annually.

Further opportunities lie in increased project and export finance within the EU, such as those implemented by the KfW subsidiary KfW IPEX-Bank, which is involved in climate neutrality transformation projects and the expansion of renewable energies, among other things. A recent example is the financing of Poland’s first offshore wind farm, Baltic Power, through a banking consortium in which KfW IPEX-Bank plays a leading role. The plant is being built around 23 kilometres off the Polish coast. As early as next year, it will be producing electricity for more than 1.5 million households. The German manufacturer Steelwind Nordenham is supplying 76 piled foundations, on which the wind turbines will be mounted. The project financing is covered by export insurance from Euler Hermes.

The project has a positive impact: it is strengthening the export business of an innovative German company and securing jobs, in addition to supporting the supply of renewable energy to the EU.

Status: 5 May 2025