Brussels – Businesses are celebrating, trade unions are concerned and politicians are divided. The European Commission’s proposal for new business-friendly rules and competitiveness, known as the “28th regime”, is provoking a range of differing and conflicting reactions. BusinessEurope, the confederation of European industry associations, considers the initiative “a positive development for competitiveness in the single market”. “European businesses “welcome” this proposal,” comments the association’s secretary-general, Markus Beyrer, as it “could simplify the procedures for setting up, expanding, and operating for entrepreneurs and companies in all Member States”. Furthermore, he hopes, “it could also help attract investment by offering a reliable and simple European corporate framework”.
Vladimír Dlouhý, President of Eurochambres, expressed satisfaction, though not entirely: “If implemented effectively, the initiative has the potential to provide founders, businesses, investors, and other stakeholders with a reliable legal framework to support companies wishing to expand across borders.” However, he laments, “insolvency matters must remain within the competence of Member States to ensure legal certainty, safeguard national regulatory frameworks that have been established over many years, and avoid unnecessary cross-border disruption.”
Francesco Cerruti, Director General of the Italian Tech Alliance, is cautious: “We are moderately satisfied because the main issue at this stage was the choice between a regulation and a directive, and the regulatory approach chosen imposes greater constraints, leaving less room for Member States’ discretion.” He adds that “a lengthy legislative process is now beginning, which we will monitor very closely to ensure the measure is as effective as possible.”
The European Trade Union Confederation (ETUC) has taken a very different tone and responded quite differently: “The proposed draft regulation does not include legal provisions to prevent companies from refusing labour inspections,” the association laments. At the same time, the 28th regime “does not include provisions to prevent companies from avoiding national labour law and collective bargaining agreements, replacing guaranteed wages or employment contracts with stock options, ignoring workers’ rights to information and consultation in restructuring processes, undermining workers’ right to board-level representation, and avoiding social security payments and national tax.” In short, General Secretary Esther Lynch states: “Workers were promised that their rights would be fully protected, but such protections are nowhere to be found in the regulation.”
Criticism and reservations regarding the 28th regime have also been voiced by the European Parliament. The Socialists (S&D) group, through René Ripasi, rapporteur for the report on the subject, adopted on 20 January, notes that the European Commission’s proposal, whilst representing “a step towards the completion of the single market”, nevertheless suffers from the fact that “contains significant and substantial gaps, such as concrete rules on capital requirements to prevent fraudulent takeovers and abuses regarding creditor protection, labour law and employee representation on the board of directors.” This means, he warns, that “without solid safeguards, the corporate form risks being exploited from the outset” to the detriment of workers. In short, the Socialists’ support is conditional on the necessary amendments being made, warns Ripasi: “The S&D Group is ready to fight for a 28th company law regime that does not leave workers at the mercy of events, and that provides for robust social safeguards.” Brando Benifei (PD) is categorical: “The proposal must be strengthened to prevent abuse and guarantee workers’ rights.”
Satisfaction has been expressed by the Liberal benches (Renew Europe, RE): “Renew welcomes this proposal,” the group commented. The proposals regarding stock options and employee share ownership are particularly welcome. “The tax treatment of employee stock options is a significant issue,”, argues Ľudovít Ódor, the group’s rapporteur on the dossier in the Committee on Economic Affairs. “We must ensure that under the 28th regime, these options are treated as capital gains and taxed only upon their actual realisation.”
English version by the Translation Service of Withub
