The European Union (EU) must speed up its economic reforms in order to develop a dynamic, integrated and efficient market and fully respect member states' social goals, the European Commission (EC) said in a report released in Brussels on January 27.

The EC, the executive body of the 15-member EU, said today's broadly favorable global economic climate offers Europe a golden opportunity to enhance durable economic growth and employment by raising its overall competitiveness.

The report uses quantitative assessments of the performance of Europe's product and capital markets to identify where regulatory and structural reforms are most urgent. It also outlines some measures to reduce market fragmentation.

"Economic reform requires reinforcement of the internal market as the cornerstone for the EU's micro-economic policies," said Frederik Bolkestein, European Commissioner for the Internal Market.

"Despite significant improvements in the past few years, the European market remains too fragmented, especially in the service sector. We must build a dynamic business environment where entreprenurship can turn technological and investment opportunities into new jobs," he said.