In respect of efficiency, recent evidence suggests that EU membership has increased it considerably since the 1980s: according to one recent estimate, GDP per capita in the EU is around 12% higher relative to a counterfactual scenario excluding Union membership.29 This positive effect of EU membership not only comes from free trade since Europe’s Single Market is the best example of a free trade area whose benefits go well beyond the removal of tariffs and non-tariff barriers: it has also established a stable legal framework that protects investors and consumers, and stimulates competition by ensuring a level playing field – which is to say, the Single Market is not only about removing trade barriers, or even just a customs union, but about common governance and having common rule of law under the jurisdiction of the European Court of Justice.
In addition, the EU has also acted in particular in emerging Europe as an anchor for an institutional environment which is conducive to well-functioning markets. The efficiency track record of financial flows within the euro area and the rest of the EU is more mixed, to say the least.