Cheating nations and new members threaten to wreck border-free Europe

Ten years after customs posts were dismantled and barriers to trade swept away, Europe's single market is being undermined by obstructive governments and faces a new threat when 10 new countries join the EU next year.

Since frontiers were declared open in January 1993, the single market is credited with creating 2.5 million jobs and boosting the EU's prosperity by €877bn (£569bn) – equivalent to €5,700 for every European household. The consumer has benefited from cheaper airfares, energy, and telecommunications. The European Commissioner for the internal market, Frits Bolkestein, claimed the internal market had "transformed Europe beyond recognition" and had "dismantled barriers and opened doors. Europeans can live, study, work or retire wherever they like in Europe".

But he also said he had insufficient powers to force reluctant governments to obey the rules, and warned that the enlargement of the EU could lead to the "fragmentation" of the single market. Although states must ensure a level playing field for business, there are more than 1,500 outstanding lawsuits against governments for failing to do so.

The European Commission has issued warnings or taken "infringement" cases against all countries, including the UK, for restricting the amount of alcohol and cigarettes which can be imported by cross-Channel shoppers. Belgium has been hauled up for hampering the import of wheelchairs, and seven nations taken to task for failing to recognise each others' qualifications for electricians, hairdressers and other professions. Among the cases taken against France, the country facing the highest number of complaints, was one over its refusal to accept that food such as "chicken wings" can be labelled in languages other than French.

These cases may need to go to the European Court of Justice in Luxembourg, which takes around two years to process a case, and yesterday Britain said it favoured giving the European Commission more powers to enforce single market laws.

Mr Bolkestein warned that the situation might worsen when the 10 new countries joined the EU in May 2004. Although eastern Europe presented economic opportunities for the internal market "there is a real risk of fragmentation if we don't act decisively".

Officials fear that produce from the new nations, particularly food, may not reach the required standard for the EU. Equally, new member states may be tempted to erect trade barriers to protect industry which is not competitive. A Commission document argued that "enlargement will offer major opportunities but it also carries risks", and added that it "may be harder to remove existing barriers and prevent the emergence of new ones in a union of 25 member states".

Mr Bolkestein said price differences in the EU were too high and many barriers were yet to fall in the service sector. A British official said: "It is very important to look again at the Commission's enforcement powers with a view to strengthening them."