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Friday, October 04, 2013

The war on EU red tape: Will this time be any different?

The headlines above speak for themselves. From time to time, the European Commission makes an announcement that it will make EU business rules "lighter", "simpler" or "smarter". But it deliberately stays away from the terms "deregulation" or "less regulation". They are usually a mixed bag, ranging from measures with real impact to irrelevant to even involving more regulation. To date, none of these initiatives have come anywhere close to achieving less, but better EU regulation across the board, that we and many businesses are calling for.

The European Commission has now unveiled the first results of REFIT - or its Regulatory Fitness and Performance Programme. Based on a 'screening' of the entire stock of EU legislation, the Commission has set out what it's planning to do (or not do) to make EU law lighter.

So will this time be different? Well, yet again, the proposal is a mixed bag.

The good stuff:

The Commission lists a number of proposals it has already put out, and are pending approval from member states and MEPs. Some of these would have a positive impact, including:
  • Making EU public procurement rules more SMEs-friendly, mainly via the reduction of the paperwork needed to bid for contracts;
  • Making it easier for professional qualifications to be recognised in different member states;
  • A one-stop-shop for clinical trials.
The Commission also stresses it is already carrying out (or will do so in the near future) thorough evaluations of EU regulations in a dozen policy areas. These include:
  • All EU rules on health and safety at work (no less than 23 separate Directives at the moment) - though the evaluation would only be published by the end of 2015;
  • EU rules on temporary agency workers (which cost the UK economy around €2 billion a year);
  • The Renewables Directive, which is dated and ridiculously micro-managing.
These rules are in desperate need of revision, so well done Commission for identifying them.

The not-so-good stuff:

Dropping proposals that are dead in the water: The Commission is offering to scrap proposals that are pending and unlikely to be adopted, which of course has no tangible impact as they haven't been adopted yet. Some of the proposals identified (e.g. a Directive simplifying VAT obligations or a Regulation on the statute of a European private company) have been pending for ages and were unlikely to ever come to pass.

Turning several rules into one rule:  The Commission also puts forth several ideas for the 'codification' and the 'consolidation' of existing legislation, meaning turning different sets of rules into one set of rules. As we pointed out in the past, if you merge ten existing directives into one, you definitely make the acquis more user-friendly, which has value in itself. However, if the substance of the rules remain, the impact on business will also remain pretty much the same, so this is of limited value on the ground.

More EU harmonisation: Somewhat cheekily, the Commission has also snuck in a proposal for more EU integration in a contentious area by presenting a Common Consolidated Corporate Tax Base as an example of simplification. Now, there may be a business-case for a CCCTB, but this also seems like back-door 'harmonisation' - which is a very different thing from 'simplification'.

In conclusion, so far there are some positive steps in here, but whether it will turn into a serious, de-regulatory exercise - with real impact on businesses - will very much depend on what comes out of the Commission's review and level of follow through.


Jesper said...

Have to love the irony :-)

The first example listed under "Examples of administrative burden reduction measures adopted" is about undoing the work of previous Eurocrats.

There is work, there is pretend work and then there is make work. Introducing something and then claiming credit for removing it seems to be of the 'make work' category.

Measure twice, cut once. Works for carpenters and might work for legislators, don't rush legislation that later needs to be undone.

And this:
"Despite the efforts of several Presidencies, the Council has so far been unable to reach a qualified majority on this legislative proposal due to the opposition of a number of Member States constituting a blocking minority on the grounds of subsidiarity and proportionality. When considering the withdrawal, the Commission will examine how the objectives of the proposed directive can be best achieved."

The statement confirms that the commission believes it has the right to bypass the subsidiarity principle.

jon livesey said...

And in other news, the Turkeys are going to examine the case for and against voting for Christmas.

Rik said...

The 'system' first of all would have to be 'unemotionised'. Plus brought to a much higher technical level.
The present system simply doesnot seem to have it in it. It's design is simply pointing in one direction.

Emotions. What I mean is that if something bad happens with one child which is not very likely to be repeated at least not frequently that you simply run the chance that legal measures will be taken that costs several Bns a year.
Politics reacting like Pavlov's dog on emotions in society and reacting on it, whatever the costs lateron. Usually started by the do-gooders (of which there are plenty in the EU as they have been kicked aside nationally now), the no human being is illegal kind just to give one of the many exampoles.

Technical. Most of the time politicians are themsleves highly emotional and simply not able to make up an overall picture on which to base the decision upon. They make Biden and Palim llok like intellectuals. Next to that you have the cynicals like Blair and Merkel that simply move into the popular direction (probably having doubts about the measures in a lot of cases). But simply emotions galore.
In Holland by far not the worst they managed to have 10 times or so longer parliamentary discussions on Mauro an illigal African kid than over the Euro rescue which played at the same time. Simply got their priorities completely wrong because of their own and the public's emotions. Plus the fact that the Euro crisis was way over their respective heads, while a friendly sad looking African 18 year (or so) boy was something they could grasp. Again no way to run a country.
The EU is very similar, people stuck in the 70's mindset of welfare/entitlement state with no knowledge (period in fact, but mainly of economics and legal stuff in particular).

Probably the way to go is get some of the childish stuff inplace.
No new measure when no similar size old one is abolished at the same time.
Demanding that a proper risk and cost analysis is added. Which will take some time, defer things and get it out of daily headlines.
Simply invest in better politicians and top civil servants (which is not equal in paying the current crap more).
Better 100 competent MPs than 600 or so of the current rubbish.
remain very sceptical. Usually Europe has come into a state where things first have to run into a wall before something is done. Autumn of its life stage (and probably close to the winter, very close).