Simplification: the new Holy Grail

  • Europe is supposed to lighten regulatory burden.
  • Everyone agrees but two camps are opposing each other on the goal of simplification.

A new political battle is looming. It remained under the radar, known by the peaceable name of “administrative simplification” until recently. This notion, on everybody’s lips in Europe, is in response to the Europe Union’s legendary propensity to regulate everything and anything that moves. Legendary, exaggerated, but nonetheless true.

Everyone, even those who protest the use of caricatures, agrees that the requirements for standardization to create a single market have generated mountains of regulations and legislation. As a result, they lost sight of the goal and now only see the means. Simplification (of regulations and procedures) and alleviation (of the costs that are weighing on companies and individuals): these are the new buzzwords. In this spirit, three weeks ago the European Commission unveiled a vast program named “Refit”. This program was created to review the Union’s legislative arsenal in view of eliminating obsolete and useless legislation, giving up current legislative projects and simplifying those having merit.

Behind these admirable shared ambitions, though, the shadow of a new battle is materializing in the form of an offensive by those supporting generalized deregulation. This issue has crystallized behind the scenes during the latest European summit last week. Although “administrative simplification” was on the Council of 28’s agenda, the British prime minister David Cameron organized an unofficial  “mini-summit” prior to the Council’s work session on Friday morning. He selected the participants, leaders of countries deemed to be close to the British liberal philosophy – including the Netherlands, Denmark, Finland, Estonia as well as Germany and Italy. Cameron presented his idea on abolishing red tape and bureaucratic burden within the Union. This vision, contained in a report, has received a lot of media attention on the other side of the Channel. A group of British business leaders drafted the report that is peppered with a few choice descriptions such as “useless”, “complicated”, “onerous”, “rigid”, “unjust” and “excessive,” referring to legislation that fetters businesses.

José Manuel Barroso was also invited to the meeting. Some wonder why the president of the European Commission attended. In any case, as the senior official and fierce “Refit” advocate, he had a lot of work to do in order to demonstrate that the Commission had already done a great deal to make the legislation more “fit” (5,590 pieces of legislation were revoked since 2005 and 600 new simplification initiatives created). 

During the “liberal” club meeting, attended by a few “curious” Italians and Germans, the counter-offensive was forming in the halls. On the other end of the spectrum, France was broadcasting its “contribution.” Its diplomats were ridiculing Cameron’s “show.” The heart of the French message: yes to greater flexibility and European scale of regulation, yes also to regular legislation review. No, however, to anything that might relate to generalized deregulation regarding anything hindering business. This would include environmental and social legislation, which are in the British crosshairs. “This is an ideological aberration in which I’m glad not to participate,” contended the Belgian prime minister, Elio Di Rupo when journalists approached him at the end of the summit on Cameron’s “mini-summit”.

An aberration? This accusation is not only aimed at Cameron: even the European Commission’s approach supported by the Council last week sparked fundamental criticism. “We’re very worried,” stated Veronica Nilsson, the confederation secretary for the European confederation of unions. “The Commission is trying to deregulate Europe!” When she organizes meetings on simplification, however, as she does for small businesses, she gets them together to invite them to complain about all the regulations. A letter to the leaders of the European Union from the environmental organizations and BEUC (the European consumer organization) along with the CES, warned against unraveling important legislation regarding security and the environment.

The tone among business leaders is a bit different. “Anything that could lead to simplifying legislation is a step in the right direction,” points out Olivier Joris, the European department director of the Belgian enterprise federation. Beware, though: guilt is often shared. Member states, including Belgium, often do a poor job of transposing European legislation. They impose it too late and push the legislation too far. The result is that Belgian companies are weakened in relation to the larger European market.

There’s another, much more political undercurrent in the “simplification” debate. It involves the United Kingdom’s desire to expand on the nature of the European Union, which is too administrative and not focused enough on the goals of the market according to Cameron. He would like to renegotiate the terms of his country ‘s membership in the Union prior to submitting the results to a referendum following the next British legislative elections.

One point of view, if the other European leaders are no longer afraid of it, gives weight to the argument for those who are willing to consider it. Keeping the United Kingdom in the Union is well worth a good “refit” of EU legislative machinery. Even some deregulation might be called for to buy the continued membership of the British Isles in the Union.

JUREK KUCZKIEWICZ

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