Competitiveness: Companies to save 37.5 billion from simplified EU rules

Brussels – The EU promises industry savings of 37.5 billion euros between now and 2029, thanks to regulatory simplification. It is a pledge the European Commission and its president, Ursula von der Leyen, put in black and white in the long-awaited and widely publicized blueprint for a grand-scale revival of the 12-star economy. The competitiveness agenda (Competitiveness Compass) appears less incisive than budgeted, with many promises and directions and even fewer firm commitments. At least it sets savings ceilings for businesses.

It is one of the few objectives hinged in a text presented as a communication — a non-legislative and non-binding act for member states. However, the EU executive promises “it will facilitate doing business for thousands of small mid-cap companies,” setting a target of cutting the administrative burden by at least 25 percent for firms and at least 35 percent for Small and Medium Enterprises (SMEs). These targets “should in the future refer to the costs of all administrative burdens, and not only reporting requirements,” the communication specifies. It translates into a reduction target of “about €37.5 billion in recurrent costs until the end of the mandate,” therefore, mid-2029.

The commitment made by the European Commission to businesses responds to that recommendation outlined in the Draghi report on competitiveness that the former premier insisted on and to the ambition that, as the Vice-President for Industrial Strategy Stephane Séjourné explains, “translates into a threefold work program: simplify, invest and accelerate our economic priorities.” By cutting red tape for businesses, the 37.5 billion euros saved will be useful for entrepreneurship and investment, thus making the EU more competitive. 

Business-friendly simplification, however, is not only a way to meet the needs of businesses but also a way for Ursula von der Leyen to ensure that her agenda moves forward. “We need to speed up the Green Deal,” the Commission president clarified at a press conference, where she spoke of savings of about 37.5 billion “per year.” This aspect is not in the communication. If we look at the rules — those that Brussels dictates — “we see how complicated and sometimes even contradictory the requirements are” for authorizations.