Abstract
This chapter explores the range of differentiation in the European Union (EU) Single Market and, specifically, the informal differentiation created through the varying transposition and implementation of EU Single Market law and EU Competition Policy, and legally entrenched differentiation. These different forms of differentiation have in effect contributed to discrimination and have undermined market integration. On the one hand, persistent soft, informal and instrumental differentiation in the Single Market risks undermining the EU’s sense of coherence or purpose, fragmenting the Union’s legitimacy and authority. However, this differentiation can be understood as temporary. On the other hand, opt-outs in the Treaty on European Union (TEU), the use of potentially permanent derogation in at least two legislative packages and the use of Enhanced Cooperation all involve legal developments that can be seen as undermining the Single Market and thus challenging the core constitutional commitment of EU membership. Increased differentiation is the result of deeper market integration and EU enlargement. However, increased differentiation through legislative and policy developments largely reflects German and French government preferences.
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