Brussels – More than a key, simplification is the medicine identified by the European Commission to remedy all the physiological ills of a complex architecture such as that of the Union. And when it comes to the single market, it goes hand in hand with harmonisation. Today (21 May), the executive vice-president responsible for industry, Stéphane Séjourné, presented a strategy to bypass the “existing obstacles that hold back trade and investment within the EU”. At the heart is the cut of some €400 million in annual administrative costs for companies that today “internationalise before Europeanising”.
To ensure that companies choose to remain in the European single market, Brussels proposes to create a new category, the small mid-caps, to which exemptions similar to those granted to SMEs would apply. Under the umbrella of the small mid-caps would fall all companies with fewer than 750 employees and a turnover of up to €150 million. For the first time, around 38 thousand companies across the EU will have access to specific exemptions from the General Data Protection Regulation (GDPR) and simplified rules. “Our nuggets,” Séjourné cuddled them, companies “often founded on territories and not on capitals, which enrich rural areas”, and which should be “treated in a different way, tailor-made”.
According to the current rules, when SMEs exceed 250 employees, they become large companies and face a sharp increase in compliance obligations. A step that “can discourage growth and limit competitiveness”, and ultimately makes companies flee abroad, particularly to the other side of the Atlantic. The European Commission proposes to exempt SMEs and small mid-caps from the obligation to keep records for the processing of personal data, except for ‘high-risk’ activities. It calls for reducing compliance burdens on the use of fluorinated gases for small companies with low commercial volumes and giving the battery industry more time to comply with due diligence rules on their supply chain.
To those who ask how all this flexibility fits in with the ambitious architecture the EU has given itself with the Green Deal, the executive vice-president of the European Commission replied: “The targets are being kept, but the path to them may be different.” In recent months, Brussels has already proposed four ‘Omnibus‘ packages to cut red tape and “create a regulatory environment conducive to innovation, growth, quality jobs and investment”. After the simplification and postponement of corporate sustainability rules, last week it was the turn of the simplification of the Common Agricultural Policy and today of the Single Market. In this way, the European Commission expects to save companies 6.3 billion per year. And three more are planned: one for defence, one for the chemical industry and one for digital.
In drafting the strategy for the ‘completion’ of the single market, which according to Brussels would increase the Union’s GDP by 3-4 per cent, businesses pointed out to the Commission the ten most ‘terrible obstacles‘ to growth on the continent. From the complexity of setting up and running a business to the Babel of European rules, from the limited recognition of professional qualifications between member states to the fragmentation of packaging rules, from excessive burdens in posting workers to another member country to ‘unjustified’ territorial constraints on sourcing. “Their elimination will improve the free movement of safe products, the cross-border provision of services and the simplification of the establishment and operation of businesses across the EU,” the European Commission predicts.
According to the Socialists and Democrats (S&D) group in the European Parliament, the other side of the coin is that “the overall strategy seems to put profit and big business before the rights of consumers and workers, reducing existing protections for citizens.” The S&D, which support the European Commission led by the European People’s Party, says it is “disappointed”, despite “some important initiatives, such as the recognition of professional qualifications, the digitisation of procedures to reduce paperwork, and the social and environmental dimension of public procurement.”
English version by the Translation Service of Withub
