Reducing the regulatory burden in Europe

BusinessEurope, the main European business association in Brussels representing employers of all sizes in the private sector through 42 national business associations from 36 countries in the continent, released various reports with concrete actions to improve competitiveness of the European economy. Among the different proposals there are many references to reduce the regulatory burden for European companies with less and smarter regulation. BusinessEurope is aligned with recent Draghi and Letta reports which put the challenge of regulatory burdens and EU law simplification among the top priorities to boost productivity and economic growth.

• Regulatory burden, the starting point:
  
  
  • Regulation is seen by more than 60% of EU companies as an obstacle to investment, with 55% of SMEs flagging regulatory obstacles and the administrative burden as their greatest challenge.
    
    
  • During the last 5 years, the EU adopted 13,000 legislative acts (vs 3,500 in the US). This mass of legislation was largely ineffective in removing existing Single Market barriers and brought major reporting and compliance costs for European companies.
    
    
  • As a result, our Single Market is underdeveloped with intra-EU trade stagnated at around 20% of EU GDP since 2007 vs more than 70% of GDP for intra-US trade. This overregulation is particularly damaging for SMEs and, it discourages start-ups from scaling up from Europe.
    
    
• Proposals to reduce the regulatory burden:
  
  
  • The European business association welcomes the new focus of the EU authorities to reduce reporting requirements by at least 25% (and 35% for SMEs) and the commitment to the so-called “Omnibus” approach that should address several pieces of legislation to simplify and reduce complexity, duplication and red tape of new reporting requirements (for example simplify and integrate CSRD-CS3D-Taxonomy requirements).
    
    
  • The association calls to set an overall regulatory burden reduction target with a dedicated program to achieve it within clear deadlines, and to that end it proposes 68 concrete measures in the most pressing areas, such as energy, circular economy, consumer protection, sustainable finance, taxation, financial sector...
    
    
• Strengthen and complete the Capital Markets Union and Banking Union: According to BusinessEurope these actions should be a necessary step to advance in the single market integration, to ensure a sound economic growth, to improve access to finance for companies, develop risk-capital and attract more investment.