Verheugen steps up efforts to cut red tape


The commissioner has pledged to slash, by 2012, the administrative costs suffered by businesses after new figures reveal that progress has been sluggish so far.

Up to now, the initiative has had limited results: 

  • 68 out-of-date proposals pending before Council and Parliament have been withdrawn; 
  • less than half of the planned 100 initiatives to simplify legislation are expected to be adopted by the end of 2006. Furthermore, many of the simplification proposals already adopted by the Commission are still pending before the Council and the European Parliament; 
  • of the 500 codification actions planned by the Commission in view of bringing together the provisions of existing acts with all of their subsequent amendments into one law, only 85 plans have been drawn up with just 52 adopted, and; 
  • more than 160 integrated impact assessments, examining the potential social, environmental and economic impacts of Commission initiatives, prior to their adoption, have been completed since 2003. 

Latest estimates reveal that the annual burden for business due to administrative costs of EU legislation will be double the original estimate of €320 billion. 

The lack of progress on this agenda caused Commissioner Verheugen to lash out at his staff last month, accusing them of “obstructing his campaign to streamline or scrap legislation” (see EURACTIV 10 October 2006). In his strategic review of better regulation, presented on 14 November 2006, the commissioner reveals that he proposes to reinforce the better regulation initiative by: 

  • Reducing the administrative burden of existing regulation by 25% by 2012: The Commission estimates that administrative costs amount to around 3.5% of EU GDP and that a 25% cut of these costs for businesses could produce a 150 billion euro boost to the European economy. An ‘Action Plan on measuring Administrative Costs and reducing Administrative Burden’ will be presented early 2007. 
  • Improving the quality of impact assessments through the creation of an independent panel of experts (the Impact Assessment Board or IAB), which will be responsible for examining draft impact assessments. The establishment of the IAB follows criticism about the fact that, in most cases, impact assessments were being carried out by the same people that had drafted the new legislation. 
  • Adding another 43 initiatives to its programme for simplifying existing regulations. 
  • In 2007, withdrawing a further 10 proposals currently pending before the legislator. 
  • Finalising a programme to reduce the volume of the existing legislation through codification by 2008. 

Enterprise and Industry Commissioner Günter Verheugen said: “We have been speaking about this for some time, now we are delivering. This will make a real difference to European businessmen.” But, he said: "the Commission cannot succeed alone", adding that the Council, Parliament and member states had to take action too. 

UNICE, the Confederation of European Business, welcomed the Commission’s committment to simplifying and improving the regulatory environment in Europe but UNICE President Ernest-Antoine Seillière said: "We need concrete progress on better regulation. Only real results will boost confidence in the overall worth of the project.” The organisation said: "Progress on simplification is far too slow even if the Commission manages to speed up the adoption of proposals. Almost all simplification proposals which have been adopted by the Commission are still pending before the Council and European Parliament and there is a considerable risk that new burdens will be added during the legislative process."

Some members of the European Parliament have expressed concerns about  Verheugen's Better Regulation initiative, saying that 'deregulation' does not amount to 'better regulation' and calling for more say in the process of withdrawing existing proposals. 

On 14 November, Enterprise and Industry Commissioner Günter Verheugen announced plans to give fresh impetus to the Commission’s efforts to cut the burden of red tape. 

Simplifying and improving the EU regulatory environment is one of the Commission’s key instruments under the Lisbon Strategy to revitalise Europe's economy. 

Dubbed "better regulation", the initiative has its origins in the Edinburgh European summit of December 1992, where EU heads of states pledged to make improving the EU regulatory environment one of the Community's main priorities, but real progress only began after the adoption of the 2002 Action Plan for Better Regulation

A number of concrete targets and objectives were then laid down in a communication adopted in March 2005, entitled "Better regulation for Growth and Jobs in the European Union". The document defines the issue in a simple equation: "Less red tape = more growth" and sets out three objectives: 

  • Impact assessments for all new proposals; 
  • withdrawing or re-drafting pending legislation that no longer have a raison d'être, and; 
  • simplifying existing EU legislation. 
  • March 2007 European Council: The Commission will ask EU leaders to agree on the 25% target for reducing the administrative burden for businesses.

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