"FIFTH FREEDOM" AS A FUNDAMENTAL PRINCIPLE OF THE EU SINGLE MARKET

The article investigates the essence of the “Fifth Freedom” of the European Union’s internal market as an integral principle for enhancing the integration of EU member states and building a competitive and innovative European economy. The aim of the study is to identify the reasons for the EU's technological lag behind the USA and China, and to summarize the directions and measures of European policy to enhance competitiveness and strengthen the integration of the internal market. The “Fifth Freedom” – knowledge, research, innovation, skills, and mobility of scientists – was defined by European scholars as the flagship of the single market, since the indicators of the EU's innovation and technological development still do not reach the level of global technological leaders. Challenges for the European Union include a shortage of entrepreneurial risk-taking culture, overregulation of the digital and educational markets, a lower level of integration between science and business, the need to create talent clusters, and the necessity for a more agile European policy to address these issues immediately. The core of these problems includes the insufficient level of trust among EU member states. To overcome these challenges, in 2025, the EU shifted its approach from gradual regulation in member countries to “fast track”, developed investment promotion programs, notably through the creation of the Savings and Investments Union, implemented data unification regulations for better portability across countries, and updated the political agenda of the European Research Area. Future plans include simplifying the regulatory system, including the introduction of the so-called 28th legal regime (a virtual state), which involves unification of tax, corporate, and other regulations for innovative companies across the entire EU space. Thus, Ukraine’s integration into the EU internal market, as well as research, educational, and innovation areas, will require large-scale reforms to adapt the principle of the “Fifth Freedom” into national legislation.