A single market for financial services could increase European Union growth by at least 1% over the next decade, according to the European Commission.

A new report by the Commission is looking to provide a 'wake-up call' for governments, whose disagreements over financial regualtion, could jeopardise a single market.

The study, to be published later today, says growth will increase to between 0.9 and 1.2% GDP if the reforms are implemented.

The Commission is also expected to argue that the simplification of financial regulations that will boost EU employment by 0.5%.

The Commission's paper is set to conclude that businesses would be the main beneficiaries of an single financial market. The cost of raising funds through equity issues will fall by 0.5 per cent, it will say.

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