How's it doing? Not very well. Rather like an elaborate medieval cathedral, the single market is a building that is taking many decades to complete. Indeed, right now, it appears to be going backward.

The EU should be insisting that the process be completed quickly. To do so would give an immediate impetus to growth. It might also help the euro work better than it is doing now.

The single market was a great idea in theory. The plan was that the national barriers to doing business across Europe would be broken down. You could set up a company in Palermo, Italy, and trade with someone in Edinburgh as easily as with the person next door. Even the tiniest company would have access to a market of more than 350 million people.

Breaking down trade barriers boosts prosperity . . . that's something that most economists agree on. The single market should have done that. The trouble is, it hasn't worked out as planned.

"From last year onwards, we have seen explicit restrictions on the free market in corporate control, '' Hugo Robinson, a researcher at the Londonbased think tank Open Europe, said in a telephone interview. "Inter-EU trade has been stagnating in relative terms compared to trade with the rest of the world, which is not what would happen in a single market that was working properly.'' Indeed, restrictions are cropping up all over the place. The EU has just formulated a services directive that is meant to open markets in everything from advertising to plumbing. Yet the agreement that emerged was so watered down as to be meaningless. After pressure from trade unions, the European parliament exempted industries such as public health care, and agreed that to enter a market you would have to obey the regulations in the country you were selling to, not just your own domestic ones.

That might sound like a small difference, yet in practice it means the EU won't have a single market in services at all. Why is that? Well, under the original proposals, if you set up an advertising agency in Milan, as long as you complied with Italian laws and regulations, you could sell your services anywhere in Europe. Now you will have to figure out the rules in 25 different countries and comply with all of them. It would be hard to think of a more effective deterrent to doing cross-border business than that.

Services matter. In a modern economy, Europeans won't prosper by selling cars, shoes or televisions to one another. It will be consulting, banking, media and software that bring in the big money.

Rich, advanced economies are based on services . . . and the EU has just, in effect, agreed that the single market doesn't apply to those.

Worse, the EU constitution has now collapsed, after it failed to win approval in Dutch and French referendums. A single market needed a common legal framework that would have allowed national laws to be overridden. The constitution could have been a starting point for that. Instead, the mood among electorates is for less European integration, not more.

The market in corporate control is becoming hemmed in as well. The French have created a list of protected industries. The Spanish and the French are restricting takeovers of their energy companies. Even Poland, new to the game of bending EU rules, is objecting to takeovers of its banks. Again, not much sign of a single market there.

How about people? The theory has been abandoned once again, with the limits that are preventing eastern European workers from coming into western Europe. What kind of single market is that?

Externally, the barriers are going up as well. Peter Mandelson, who is fast turning into the worst trade commissioner the EU has ever had, has already introduced import restrictions on textiles. Now he is putting tariffs on shoes made in countries such as China and Vietnam.

Not surprisingly, trade within the EU won't grow the way it should. "For the EU as a whole, intra-EU trade is falling as a share of members' trade, " Open Europe said in a recent analysis. To take the UK as an example, by the end of 2005, its trade with euro-area countries had been overtaken by trade with other nations for the first time.

The failure of the EU to complete the single market matters for two reasons.

First, it would be good in itself. The more you break down trade barriers, the faster you grow. Big companies can capture economies of scale, driving down costs and prices. Small companies can expand faster. Niche businesses can flourish in a large market, yet wither in a smaller one.

Next, the euro needs the single market to work properly. A common currency shared by 12 nations has to serve a single economy or it can't function.

Instead, Europe's economies are remaining obstinately national. That explains why the European Central Bank is having so much trouble running a monetary policy for the euro area.

Perhaps before it embarks on any more plans for integration, the EU should complete projects that were meant to be finished more than a decade ago.