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EU leaders agreed to cut Community bureaucracy by 25% at their summit on 9 March 2007, but, to the disappointment of business leaders, they refused to commit their administrations to the same target and few other pledges were made to speed up economic reforms.
Administrative burdens imposed by governments (in the form of paperwork and statistical obligations) amount to around 3.5% of EU GDP, according to Commission estimates.
They are a particular hindrance for the competitiveness of small- to medium-sized enterprises (SMEs), which have less capacity to deal with heavy administrative requirements.
With SMEs accounting for around 70% of EU GDP, unleashing their economic potential and rousing "entrepreneurial energy" through measures to cut unnecessry red tape has become a key goal of the EU's Lisbon Strategy for growth and jobs.
In November 2006, Enterprise and Industry Commissioner Günter Verheugen proposed setting a legally binding target for cutting such administrative costs by 25%. The Commission says that this could bring a €150-billion boost to the European economy (EurActiv 16/11/06).
Meeting on 9 March 2007 for the European Spring Summit, leaders of the EU's 27 member states agreed to the Commission's proposed goal of cutting Community red tape by 25% before 2012.
But they discarded the idea of setting binding targets at national level, despite the fact that national bureaucracy accounts for around half of the bloc's administrative costs.
Instead, they opted for a softer text, which states that the European Council "invites" member states to set "their own national targets of comparable ambition" by 2008, "taking into account the different starting points and traditions".
A number of countries had been worried about the high costs of actually measuring administrative burdens related to existing and new regulations at national level.
Other than this decision on improving regulation, no other real commitments, as regards Europe's growth and jobs strategy, came out of the Summit, which instead saw leaders congratulating each other on the recent EU economic upswing.
Leaders also stressed the importance of deepening the internal market, by better enforcing the mutual-recognition principle for goods and fully transposing the Services Directive.
German Chancellor Angela Merkel welcomed the fact that the Summit's conclusions called for member states to commit to a certain level of ambition on bureaucratic cuts, saying: "The Commission has very rightly pointed out that it hopes that member states assume equally ambitious targets and we were able to include this in the conclusions". She said that this should be seen as a "joint shared commitment" between member states and the EU executive.
UK Prime Minister Tony Blair said that better regulation was also a top British priority: "This is something we are passionate about…and for the European Union to come together with such an ambitious target is a very good thing."
EuroCommerce Secretary-General Xavier Durieu told EurActiv that following the summit "the overall feeling is fairly disappointing". He explained: "We had been expecting commitments but we have heard only hopes and words." He added that the failure of member states to agree to a national 25% target for reducing administrative burdens showed their "lack of ambition", and that the Council's conclusions that the Lisbon Strategy was "delivering" revealed a "worrying confusion" between the current economic upswing and a global policy that "is still far from reaching its objectives".
UEAPME Secretary-General Hans-Werner Müller said that the Spring Summit was a missed opportunity to speed up the reform process in key areas such as creating a Community Patent and furthering labour-market reforms. He added: "Member states went on at length congratulating each other on their recent economic performances. However, when it comes to substance, one can easily sense the underlying lack of trust and confidence. In fact, no new concrete commitments came out of this Summit, and member states will not be prepared at all by the time the next economic downturn comes."
Eurochambres Secretary-General Arnaldo Abruzzini said that he hoped the savings obtained by the reduction of red tape would help to cover the costs needed to reach the new green targets also endorsed by EU leaders during the Summit.
"Now that the EU Council has decided binding targets on renewable energies and for a unilateral commitment to greenhouse gas reduction, heads of state and government must counterbalance the additional costs that will result for businesses with tangible cost reductions in other fields, eg improvements in the functioning of the internal market and reduction of bureaucracy costs through better regulation. In this way, we will make sure 'ecology' truly rhymes with 'economy'."