Opinion of the Economic and Social Committee on "Simplifying rules in the single market (SMO)"
Date: 2000-10-19
Institutions: Provisional data
Subjects: EU law, European Economic and Social Committee, administrative formalities, application of EU law, code of conduct, single market

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II

(Preparatory Acts)

ECONOMIC AND SOCIAL COMMITTEE

Opinion of the Economic and Social Committee on ‘Simplifying rules in the single market (SMO)’

(2001/C 14/01)

On 29 April 1999 the Economic and Social Committee, acting under Rule 23(3) of its Rules of Procedure,
decided to draw up an opinion on ‘Simplifying rules in the Single Market’.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the matter, adopted its opinion on 19 July 2000. The rapporteur was Mr Vever.

At its 376th plenary session (meeting of 19 October 2000) the Economic and Social Committee adopted
the following opinion with 86 votes in favour and one abstention.

1.

Summary of the Committee’s recommendations

1.1.
The Committee stresses the urgent need to embark on
a process of simplifying regulations in the single market,
whilst also improving the quality of their provisions, their
incorporation into national law and the freedoms and responsi-
bilities of the civil society players.

1.2.
To this end, the Committee calls on the Stockholm
in the spring of 2001 to adopt, on a
European Council
proposal from the Commission, a multiannual simplification
plan, setting out objectives, priorities and methods, and
earmarking budgets and resources for monitoring and follow-
up action. The implementation of this plan should be reasses-
sed each year, at the spring European Council, on the basis of
a Commission report.

within its own departments and by attaching the recently
created simplification unit directly to the Secretariat and
providing it with sufficient resources. The Member States and
their administrations will also have to be encouraged to adopt
codes of conduct and to help to disseminate best practice in
this area.

1.4.
The Committee stresses the need to improve the impact
assessments which must accompany all draft legislation: these
assessments must henceforth be carried out under conditions
which fully guarantee their independence and quality, they
must
include a systematic examination of alternatives to
regulatory measures (i.e. contractual agreements, self-regu-
lation and co-regulation), together with a rigorous assessment
of the contribution which the proposed legislation will make
to simplification, and they should be made public.

1.3.
The Committee proposes that this plan provide for the
adoption of codes of conduct by the EU institutions, ensuring
that they help to promote the simplification of rules rather
than make them more complex. The Commission will have to
set an example, by inculcating a culture of simplification

1.5.
The Committee recommends that the Commission re-
assess its choice of the regulatory instruments to be employed;
in addition to prior consideration as to whether alternatives
exist to regulatory measures, the Commission should also (a)
make more frequent use of Regulations in cases where this

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would appear to be necessary to achieve effective simplifi-
cation; (b) create conditions for successfully extending mutual
(c) reduce freedom for manoeuvre over the
recognition;
interpretation and implementation of Directives, and (d)
consider introducing Directives which would entrust the socio-
economic players, rather than merely the Member States, with
a share of responsibility for specifying and implementing the
fundamental requirements of the Directives.

The Committee, as the EU assembly representing the
1.6.
‘users’ of Community rules, asks the Commission to ensure
that it is actively involved in the framing, implementation
and annual review of this simplification process, prior to
consultations with the Parliament and the Council.

1.7.
In particular, the Committee wishes to be consulted by
the Commission every year on key topics which merit coverage
in SLIM projects and test panels.

1.8.
In order to make an effective contribution to the
simplification process, the Committee is adopting a code of
conduct, according to which it will:

— engage in dialogue with the economic and social councils
in the Member States so as to enable them to play an
analogous role at national level to the role which the
Committee has set itself at European level, in order to
contribute to the success of the simplification process.

2.

Preliminary comments

Simplifying rules is now, more than ever, a matter of

2.1.
public concern in Europe for a number of reasons:

2.1.1.
the steady increase in the number of national rules
which is curbing the scope for freedom of action and private
and collective initiatives in the Member States, whilst at the
same time complicating mutual recognition between states at
European level;

2.1.2.
the recurring questions over the extent of inter-
vention by the EU authorities and the complex nature of
even the harmonisation provisions, which frequently involve
inextricable overlaps between EU and national
levels of
intervention;

— keep an ongoing strict watching brief on what has to be
done to achieve simplification and on the quality of the
rules and their efficacy from the point of view of their
‘users’;

2.1.3.
the continued existence of superfluous specific pro-
visions — and even the addition of further such provisions by
the Member States when they transpose EU provisions into
national law — not to mention the delays and difficulties in
transforming these provisions into national law.

— take the necessary steps, when organising its work, to
enable it to respond in good time to early consultations
in these fields;

— draft an annual report on the stage reached in the

multiannual simplification plan;

— systematically examine the impact assessment for each

draft;

— draw the attention of the EU institutions to the possible
need to steer EU rules towards an approach based on
contractual agreements, self-regulation and co-regulation;

2.2.
This concern over the need to simplify rules is linked
to the EU public’s growing aspirations regarding the quality of
goods, services, work, living conditions and the environment.
The quality of laws and rules cannot be excluded from these
overall expectations. The EU should be regarded in this field,
as in others, as a guarantor of positive added value. The
emergence of a ‘new’ trading economy, built on a more
interactive, transparent and decentralised relationship, also
calls for the development of a corresponding ‘new adminis-
tration’ by citizens, based on a ‘new legislation’ better adapted
to the cultural changes in the behaviour and aspirations of
21st century Europeans. The objective set by Commission
President Romano Prodi, namely to build an EU administration
of excellence, can and must point the way towards the major
shift which Europeans are now waiting for.

— engage in dialogue with the European economic and
social players to alert them to the need for them to
meet their direct responsibilities — particularly their
contractual responsibilities — in respect of EU rules;

— engage in dialogue with the Committee of the Regions
regarding the regional aspects of simplification; and

Studies have been carried out at EU level into simplifi-
2.3.
cation requirements, one example being the Molitor Report of
1995. These reports were backed up by similar reports drawn
up by international bodies, such as the OECD. Several Member
States have carried out appraisals and introduced measures to
curb the excessive amount of new rules and simplify existing
rules.

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2.4.
At EU level measures have been set in train in recent
years with a view to (a) endeavouring to improve methods of
intervention, for example by drawing up impact statements,
and (b) correcting excessively complicated rules, mainly
through the use of SLIM projects. However, neither pro-
fessionals nor the EU public as a whole feel that really
significant results have so far been achieved in this field.
Indeed, the EU is frequently felt to complicate matters by
imposing further ‘technocratic’ restrictions on national rules,
without fundamentally altering the complexity or the quantity
of those rules.

2.5.
The Single Market Observatory (SMO) has made a
number of very clear observations, which back up the above
analysis, on the basis of surveys and hearings which it has
organised, in particular the hearing held on 17 May as part of
the preparations for this report. Its findings are as follows:

2.5.1.
vis the expectations of users;

EU rules are generally regarded as too complex vis-à-

2.5.2.
simplification of the rules is regarded as being really
necessary for users; it is widely agreed that if such simplification
is carried out properly it would not be prejudicial to the
interests of civil society players but should rather directly
promote their autonomy, consideration of their views and
their interests;

however opinion is equally divided between those
2.5.3.
who see harmonisation, a priori, in terms of its contribution
to simplification, and those who are concerned about the
frequent overlap of European and national provisions, which
is felt to result as much from over-intervention on the part of
the EU as, conversely, from the maintenance or even introduc-
tion of superfluous national provisions when EU Directives are
transposed into national law;

2.5.7.
there is a universal expectation that the Economic
and Social Committee will actively press for simplification in
the interests of ‘users’, with particular emphasis on its natural
role in ensuring the development of contractual and self-
regulatory alternatives to traditional regulatory measures.

The Lisbon European Council, held on 23 and
2.6.
24 March, provided a mandate for responding to this evident
desire for a new approach to simplification by agreeing to set
out, by 2001, a strategy for simplifying the regulatory
environment. This would address the way in which the public
administration operates, at both national and EU level, and
would pinpoint the areas in which the Member States need to
step up their work on transposing EU law. As part of its new
targeted measures for the Single Market, the Commission plans
to put forward proposals for achieving these objectives at the
beginning of 2001.

The Economic and Social Committee — as the rep-
2.7.
resentative of the economic and social players who are the
‘users’ of the rules in question — considers that improving the
quality of regulations in the EU is vital for the following
reasons:

2.7.1.
Single Market;

it directly impacts on the smooth operation of the

2.7.2.
for the European venture;

it is a determining factor in the EU public’s support

2.7.3.
it forms part and parcel of the general issue of better
governance in Europe, an issue which will be the subject of a
European Commission white paper to be issued by June 2001;

2.7.4.
preparations being made for EU enlargement.

it is a matter of growing urgency in the light of the

2.5.4.
an extremely large majority consider that insufficient
progress has been made on simplification at Community level,
whilst there is unanimous emphasis on the fact that the
simplification process needs to be speeded up considerably
before enlargement;

there is also universal emphasis on the need for a
2.5.5.
parallel approach to simplification in the Member States if the
process of simplification of EU rules is to succeed;

2.5.6.
similarly, there is universal agreement on the need to
develop contractual dialogue and self-regulatory measures, in
preference to the exclusivity of traditional regulations, in areas
which are particularly sensitive for the economic and social
players, such as social affairs, environmental protection, con-
sumer policy and e-commerce; and

2.8.
The Committee recognises that the successful simplifi-
cation of rules is a complex matter; it is essential to avoid a
number of pitfalls and to adopt the right approach. The aim is
not drastic and simplistic deregulation which would jeopardise
the quality of both products and services and the overall
interest of all ‘users’ — be they business people, workers or
consumers. Both the economy and society need rules in order
to enable them to operate effectively; a number of conditions
do, however, need to be met:

2.8.1.
rules must be drawn up and applied at the right level
which, depending on the circumstances, may be international,
EU, national, or regional or local. Globalisation is not so much
generating a surplus of rules at international level but rather a
shortage of such rules. This fact has been made abundantly
clear by the problems being faced by the WTO at a time when
there is a growing surplus of national rules and an overlapping
— which needs clarification — between national and EU rules;

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2.8.2.
rules must be drawn up in a balanced way, avoiding
the introduction of new constraints which are out of pro-
portion to the objective being pursued and allowing the
development of areas of freedom and contractual autonomy
for civil society players, who should be directly involved in the
elaboration and implementation of simplification policies;
simplification will not succeed if it is the almost exclusive
reserve of civil servants.

2.9.
The EU level
simplification issue as:

is the right level for addressing the

2.9.1.
it provides a fundamental basis which allows the
Union, bolstered by an effective and coherent single market,
to play its part in the vital process of drawing up rules at
international level, in the context of globalisation;

one of the intrinsic aims of EU legislation is — and
2.9.2.
this needs always to be borne in mind — to simplify things,
since it seeks to harmonise and unify 15 different sets of
national rules in order to enable the single market to operate
effectively, whilst not being above criticism as regards the
areas and content of EU intervention;

2.9.3.
national rules should not disregard the needs of an
effective single market by applying EU rules too freely or by
failing to recognise their vital role in simplifying the operation
of this major market.

The purpose of the present own-initiative opinion is
2.10.
not to set out a new list of simplification measures in specific
areas of intervention but rather to:

get

to grips with the reasons behind what

2.10.1.
is
generally regarded as a failure, by analysing why EU rules are
so complex and making an appraisal of both the main positive
limitations of the simplification
points and also the real
measures already set in train;

2.10.2.
propose that a more coherent and more in-depth
approach be adopted in order to bring about successful
simplification; this means reviewing the responsibilities of the
various European players under the simplification policy and
introducing more effective methods and criteria for appraisal,
consultation and follow-up action.

3.

The reasons for the complex nature of EU rules

3.1.
The main reason why EU rules are complex is linked
to economic and social needs and the heightened political
demand for action at EU level, when such action has to take
account of national situations and cultures which often differ
greatly. It is symptomatic that the call made at the Lisbon
in March 2000 for the early introduction of a
Summit
European strategy to promote simplification coincided with
the establishment, at the same Summit, of an unprecedented
agenda of new economic and social measures to be carried out
jointly by the EU institutions and national governments. This
desire to simplify rules may at first glance appear to be like
trying to square the circle bearing in mind the complex
problems hampering harmonisation at EU level, such as the
cumbersome decisionmaking procedures,
the influence of
forces opposed to administrative change and the pressure
brought to bear by the various lobby groups in Brussels and
Strasbourg.

3.2.
The abovementioned factors are aggravated by a failure
to carry out a systematic and reasoned appraisal of the cost of
having such complex rules, since neither the EU institutions
nor the national governments have so far established real ways
of pursuing the EU regulatory process while also simplifying
it; they have confined themselves to carrying out a number of
ad hoc measures which are of limited effect in the absence
of a general, coherent political framework for promoting
simplification. Cost needs to be understood in a comprehensive
way; in other words, equal account must be taken of issues
such as the cost of the time unduly lost by members of the
public as a result of excessive bureaucracy, the economic cost
of the excessive burden imposed on enterprises, particularly
SMEs, by the need to respond to complex rules, and the
budgetary and therefore fiscal cost of an over-bureaucratic
distribution of administrative expenditure, when this money
could be better used for the public benefit.

3.3.
Institutional procedures are partly to blame, even
though in their case they impose constraints rather than giving
rise to systematic obstacles to simplification. All too often, the
only way to achieve agreement which enjoys majority (or
better still unanimous) support — firstly from members of the
Commission and subsequently at the Council and in the
co-decision and conciliation procedure with the European
Parliament — is by accepting a complex political compromise,
in which the clear interest of users often goes by the board.
The — in itself — praiseworthy desire of the half-yearly
presidencies of the EU Council to adopt a good tally of
decisions may also lead to sacrifices as regards the intrinsic
quality of particular decisions.

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3.4.
The choice of legal instrument is frequently unsuitable.
Some Regulations are unduly cumbersome and complex when,
with a little more give and take, they could have been simplified
without becoming any the less effective — indeed rather the
opposite. Some Directives give Member States excessive room
for manoeuvre without imposing any proper checks either on
the level of complication which this leeway could cause to
‘users’, or on the resulting level of harmonisation which will
be inadequate to ensure proper operation of the Single Market.
In some cases,
the very freedom which Directives leave
Member States to introduce or retain national provisions
which go way beyond the common provisions may unduly
complicate relations, when the use of a uniformly applied
Regulation would have simplified them under terms that
would have been acceptable for all the parties concerned. In
still other cases, mutual recognition clauses cannot be applied
because there is no legal follow-up or monitoring to enable
them to operate properly in practice.

3.5.
Attention is also drawn to the fact that virtually all EU
rules derive exclusively from the close circle of EU institutions
which have decision-making or co-decision-making powers,
namely the European Commission, the European Parliament
and the Council. Although there has been an extensive
European debate on subsidiarity, it has hitherto focused too
exclusively on the vertical aspects of the concept (i.e. the
distribution of functions between European and national or
regional level) and has largely neglected the horizontal aspects
(i.e. the distribution of functions between rules and areas where
contracts or codes of conduct can be applied). Consequently,
although this horizontal dimension is firmly entrenched at
national level in many Member States, it has not been extended
or given rise to comparable measures at European level. With
the notable exception of the European social dialogue (under
which three inter-sectoral agreements — subsequently trans-
formed into Directives on parental leave, part-time work and
fixed-term work — have so far been concluded — thereby
making it an instrument which remains under-utilised), togeth-
er with a number of voluntary agreements and codes of
conduct (e.g. on environmental conservation — under the
European Auto Oil Programme — and the reduction of energy
consumption), the socio-economic players directly concerned
by the introduction of EU rules benefit from few areas of
contractual freedom. This failure to establish a proper culture
of partnership — based not only on consultation but also,
where appropriate, on co-decision-making powers — with the
socio-economic players, combined with the adoption of an
essentially political and administrative approach to decision-
making, makes it difficult for civil society representatives to
play a responsible role in the simplification drive. Instead,
this failure prompts them to intensify pressure of a highly
corporatist nature — which is not conducive to simplification
— on political and administrative decision-makers.

3.6.
Consultative bodies, such as the Economic and Social
Committee, which represent the full range of economic and
social players, by no means always have sufficient institutional
clout vis-à-vis the tripartite joint decision-making structure
represented by the European Commission,
the European
Parliament and the Council. As it is consulted at a late stage, at
the very moment when the co-decision making bodies take up
the matter, the Committee faces real institutional problems in
bringing sufficient influence to bear to enable EU rules to
reflect the views of the ‘users’ by moving more towards
simplification. If the quality of EU rules is to be improved,
consideration must also be given to upgrading the role played
by consultative bodies.

3.7.
There are frequently problems of alignment between
EU rules and national rules. The increasing recourse to
Directives, rather than Regulations, means that the provisions
agreed at Brussels are often simply ‘tacked onto’ national laws
without changing them in a substantial way, let alone taking
their place. Sometimes Member States also bolt on much
more far-reaching national provisions when transposing EU
Directives.

The lack of

3.8.
‘euro-compatibility’ of many national
provisions also impedes the smooth operation of mutual
recognition schemes, as was clearly shown in a report issued
by the Commission in June 1999.

4.

The consequences of having complex rules

4.1.
From an economic and social standpoint, the existence
of overly complex EU rules is damaging to economic competi-
tiveness which, in the current extremely competitive inter-
national context, is, more than ever, a necessary, though not
always sufficient, condition for job creation and growth. It
penalises entrepreneurial spirit and creativeness and hampers
the establishment of small businesses, including the types of
start-up which are essential if the EU is to have a dynamic ‘new
economy’. On a more general level, complex rules impede the
capacity to innovate and curb the ability to adapt to changing
circumstances and carry out reform. The current situation
represents a major handicap to a Europe which is in the
throes of change and has to contend with the demands of
globalisation and the need to find a new creative dynamism.

Complex rules also have a detrimental effect on the
4.2.
freedom and social
life of the people by imposing time-
consuming procedures and costs. They also increase inequality
as not everyone is able to understand them, and they heighten,
rather than reduce, the factors which cause social exclusion.

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4.3.
From a political standpoint, the complexity of EU rules,
for which the Member States refuse to accept direct public
responsibility, fuels the concerns, not to say the alienation, of
a large part of public opinion vis-à-vis ‘eurocracy’ at a time
when the EU should rather be regarded as offering an
additional guarantee of freedom, democracy and security. The
lack of scope for contractual dialogue between the socio-
economic partners directly concerned is also sapping the
vitality of collective democracy at EU level at a time when
major economic, technological and social challenges make it
necessary to expand direct public participation in the EU.

4.4.
The existence of complex rules in the internal market
reduces the EU’s ability effectively to remove barriers at a time
when it needs a new dynamism to complete the essential tasks
facing it in the run-up to enlargement. A number of simple
legal instruments have yet to be introduced at EU level, such
as a real European company statute, a reliable and inexpensive
Community patent and a simplified EU VAT regime.

From the legal standpoint, having complex EU rules
4.5.
also serves to amplify the number of cases of failure to
incorporate EU provisions into national law and the number
of legal disputes with the Commission and the Court of Justice.
One of the key goals of simplification should be to achieve a
higher level of transcription of EU provisions into national
law and a marked improvement in the enforcement of EU
provisions.

4.6.
This issue is of major importance in the light of the
preparations for EU enlargement. The simplification of EU
rules will help the applicant states to fulfil the heavy demand
placed upon them of having to incorporate into national law
the whole body of EU legislation, whilst also facilitating
transposal in the existing 15 Member States, who have hardly
shown the best example to the applicant states up to now.
Simplification of the rules will also help to improve the
operating conditions for the single market in an enlarged EU.

out. Whilst constituting a praiseworthy initiative, this measure
has had limited impact in its current form since no strict
the
guarantee can be given as to the independence of
assessment, it fails to include a prior examination of alterna-
tives to EU rules, makes little or no effort to carry out a
systematic verification of the real degree of simplification
resulting from the proposed provision and, finally, since no
external publicity is given to the impact assessment.

5.2.
In the 1990s the European Commission paid consider-
able attention to drawing up (a) green papers, designed to
stimulate public debate before a start was made on drafting EU
provisions, (b) white papers, setting out an overall programme
of rules for a particular field, and (c) communications, which
identify problem areas and provide analyses in the run-up to
the presentation of specific proposals. With technological
backup provided by the Internet, which the European Com-
mission now rightly utilises to a large extent, particularly
through its ‘Europa’ site, the abovementioned practices have
made it possible to trigger an interactive public dialogue on
proposed EU action. The impact which this extended prior
consultation has on the simplification of rules is, however,
bound to remain limited as long as the Commission confines
itself to launching a debate on the proposed contents of EU
provisions, rather than making a systematic appraisal of
possible alternatives to EU rules, such as codes of conduct and
forms of self-regulation.

5.3.
In 1995, in response to a request from the European
Council, a working party was set up under the chairmanship
of Mr Molitor to consider ways of simplifying EU rules.

5.3.1.
In addition to a number of proposals for the
redrafting of several technical rules, the report set out 18
general recommendations. Many of these have since been
largely put on the backburner and it is worth recapping them:

— to speed up the consolidation of rules at both EU and

national level;

— to set in train a programme of simplification covering all
existing EU laws and their incorporation into national
law;

5. Appraisal of the simplification measures already

carried out

— to ask the European Commission to submit reports
on the rules which should be retained, amended or
withdrawn;

5.1.
During the 1980s, in the middle of the subsidiarity
debate, the Commission agreed to draw up an impact assess-
ment on all draft EU provisions, designed to justify EU action
and analyse its cost-benefit ratio. These impact assessments
follow a common pattern, comprising justification in the light
of the subsidiarity principle, an assessment of the economic
and social impact — including the consequences for SMEs —
and an indication of the consultations which have been carried

— to raise a number of questions prior to the introduction
of draft rules (whether the proposals are appropriate,
whether the subsidiarity principle has been respected, the
cost-benefit ratio, alternatives to public action, pro-
portionality, time restrictions);

— to ask the European Commission to carry out public
investigations into the incorporation of EU measures into
national law;

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— to observe a series of criteria for the introduction of all
new measures: the need for provisions to be readily
understandable, to have well-defined objectives, be con-
sistent with existing laws, the need to define the field of
application, to set a realistic timetable, and to make
provisions for review procedures;

— to publish prior studies;

— to consult

interested parties (consumers, businesses,
workers) in an effective and systematic way and in good
time;

— to set out explanatory memoranda in respect of employ-

ment, competitiveness, costs and innovation;

— to make public the reasons why Member States support

or oppose the proposed measure;

— to introduce systematic, public procedures for assessing

the outcome of the measures;

— to pursue simplification at national and local levels, and

also when transposing EU law into national law;

— to monitor enforcement of the provisions by the national

authorities more closely;

— to fine Member States which drag their feet over the

enforcement of EU rules;

— to make use of Regulations rather than Directives if this

can further the goal of simplification;

— to apply mutual recognition wherever possible;

— to ask the European Commission to give advance notice
of its proposals and to make increased use of green
papers and white papers;

— to ask the Commission to present progress reports on
simplification;
the
Commissioners responsibility for simplification and set-
ting up a small central coordinating unit to provide
backup.

this could involve giving one of

Five years after its publication the Molitor report
5.3.2.
remains highly topical, particularly since its recommendations
have achieved few really significant results. Two main reasons
may be advanced for this:

measures to ensure simplification policy which was viable in
the long-term and was constantly strengthened;

5.3.2.2.
secondly, the Council which commissioned the
Molitor report did not take practical action at the time since it
was not able to use the report as a basis for adopting a genuine
political programme on simplification, although the report
the
explicitly recommended that
Commission has built on several of the report’s recommen-
dations, but mainly in ad hoc and partial initiatives.

for its part,

it did so;

Of the ad hoc initiatives introduced by the Com-
5.4.
mission, particular mention must be made of its Simplification
of Legislation in the Internal Market
(SLIM) programme,
introduced in 1996. This initiative has already resulted in
fourteen projects designed to simplify various rules adopted
earlier by the EU. The SLIM working parties, comprising an
equal number of experts representing national administrations
and representatives of users, put forward proposals for simpli-
fying EU rules adopted at least five years ago. These projects
cover a very wide variety of fields (including ornamental plants,
dangerous substances, prepackaging, construction materials,
fertilisers, electromagnetic compatibility, banking services,
insurance, company law, recognition of diplomas, social
security provisions, VAT, intrastat statistics and external trade
statistics). As the Commission pointed out in its most recent
assessment report issued in March 2000, these projects have
made good progress in formulating recommendations for
simplification and have enabled it to present a large number
of new simplified drafts. The outstanding problem remains the
final adoption of these new proposals, very few of which have
so far been adopted by the Council and the European
Parliament (e.g. proposals dealing with ornamental plants,
variables in intrastat statistics and combined nomenclature
with regard to external trade). With a view to revitalising the
SLIM initiative, in March 2000 the Commission presented 15
reform proposals aimed at
increasing accountability and
improving coordination between the various players.

5.3.2.1.
firstly, the report could have been improved by
taking its analysis and proposals still further: it could have
highlighted more clearly the reasons behind the administrative
complexity (e.g. a general culture amongst decision-makers
and administrators which does little to encourage simplifi-
cation) and consider how the situation could be remedied. The
report concentrated on tackling the symptoms and effects of
having complex rules;
it was difficult to propose effective
solutions since the necessary prerequisite was missing; more-
over, the report failed to make explicit provision for the
introduction of monitoring, audits and other budgeted

5.5.
In 1998 the Commission also launched a number of
pilot projects involving European Business Panels; the aim was
to make prior assessments, with a direct input from the
business world, of the justification for and the cost of a number
of proposed rules. This procedure has been used in three cases,
concerning respectively the simplification of tax representation
for VAT, the harmonisation of accounts and electrical and
electronic equipment waste (in the latter case, reactions were
from 1 744 enterprises). However, this procedure
sought
remains entirely experimental, and the Commission does not
yet have any plans for using it more widely or systematically.

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5.6.
In 1997 the Commission also set up the Business
Environment Simplification Task Force (BEST) with the aid
of representatives of socio-economic interest groups and
universities. This task force submitted a report containing
19 recommendations in 1998. These focused on the business
environments in the Member States in a wide variety of fields
(administrative procedures, education and training systems,
labour flexibility, finance and taxation and innovation). The
Commission is due to present an appraisal report in the
autumn of 2000 on the implementation of these recommen-
dations.

5.7.
An interinstitutional agreement on drafting quality was
published in March 1999, following on from the Treaty of
Amsterdam; this agreement is binding upon the Commission,
the Council and the European Parliament. It is as yet too early
to assess the impact of this agreement.

Each year the Commission now publishes a report on
5.8.
‘better lawmaking’ in which it reports on the contribution it
has made to simplifying EU rules. The most recent report,
published in November 1999, outlined the progress of a
number of recent simplification measures and drew attention
also to the work being carried out to codify, recast and
consolidate EU rules, avoiding overlaps and deleting outdated
provisions.

5.9.
In addition, as part of the internal administrative
reforms which it set in train in the autumn of 1999, the
Commission established a unit
for the simplification of
regulations in its Enterprise DG. Though this is a welcome step
forward, the action taken by this unit will remain limited until
such time as it is directly attached to the General Secretariat
since simplification has to become a requirement for all the
DGs and other departments of the Commission.

5.10.
For its part, the Internal Market Council of 25 May
2000 emphasised the need to coordinate the various existing
simplification initiatives (SLIM, BEST,
impact
assessment) more effectively in the framework of a coherent
strategy, which the Commission is to present to the European
Council in the spring of 2001.

test panels,

5.11.

It is therefore clear:

5.11.1.
firstly, that a large number of measures have been
introduced in recent years with a view to taking Community
action on simplification, but that, however commendable their
aims and scope and the methods involved, they have not had
a sufficient impact to dispel the general feeling that not enough
has been achieved in this field;

meeting in spring 2001, the time has come to consider a
new approach bearing in mind the lessons learnt from the
abovementioned partial failures/partial successes.

6.

The Committee’s proposals for helping to build a
new approach to the simplifying of rules

As was clearly brought home by the hearing organised
6.1.
by the Single Market Observatory (SMO), a change of approach
is needed if progress is made more quickly and more effectively.
The Committee therefore advocates a genuine ‘simplification
process’, comprising:

6.1.1.
a multiannual simplification plan, which will enable
the simplification process to be conducted in Europe within a
coordinated framework;

6.1.2.
codes of conduct for the EU players in the regulatory
process; these codes of conduct should also apply to the
Member States;

6.1.3. more effective use of the impact assessment which
needs to be extended and made into an integral part of the
regulatory process; and

active involvement of

6.1.4.
the economic and social
partners and all the various civil society players, without whose
assistance no simplification policy can succeed.

The ESC above all urges the Council to act upon its
6.2.
Lisbon mandate by adopting, at its meeting in spring 2001, a
genuine multiannual plan for the simplification of rules. This
plan, which should be based on the detailed draft which the
Council asked the Commission to submit to it at the beginning
of that year, should set out priorities and a timetable for action
and should be backed up by innovatory methods, budgetary
funding and effective means of appraisal. The Committee
recommends that the plan be conceived in such a way as to
ensure that the major changes in this domain are completed
by 2005 at the latest, as this is the year in which the current
terms of office of members of the European Parliament and
the Commission come to an end. The plan should make
provision for:

6.2.1.
in the existing rules as regards the need for simplification;

remedial measures to correct the major shortcomings

6.2.2.
preventive measures to ensure that draft Community
rules currently in the pipeline and future rules pursue a new
approach to simplification;

5.11.2.
secondly, that now that the Council has instructed
the Commission to submit a simplification strategy for its

6.2.3.

back-up measures in the Member States.

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6.3.
The plan should trigger a genuine process of simplify-
ing European rules, which will complement and amplify the
impact of the energising of the economy, the internal market
and employment already initiated at Luxembourg, Cardiff and
Cologne. It has been agreed to hold a special European Summit
each spring to review the progress made on the economic and
social initiatives decided at Lisbon, and this annual review
should include an assessment of progress on simplification,
based on a Commission report containing scoreboards.

6.4.
Turning to the contents of proposed new rules, the
Committee would draw the attention of the EU’s institutions
to the need to avoid jeopardising the added value of such
proposals through excessive compromise which, when added
to specific national features, would be detrimental to the
interests of users. Directives should also not contain too many
options regarding implementation at national level since that
would undermine the whole purpose of harmonisation. All
legal instruments, whether Regulations, Directives or mutual
recognition schemes, must contribute to simplification. The
Committee also stresses the need to continue work on (a)
consolidating rules in order to avoid overlapping provisions
and (b) ensuring that the language used is readily comprehen-
sible and straightforward in accordance with the inter-insti-
tutional agreement of December 1998.

6.5.
The Committee underlines the need for Member States
to show greater discipline in transposing EU rules, since the
latest Commission scoreboard showed that 13 % of single
market directives which had reached their deadline, i.e. 194
out of a total of 1 489, had still not been transposed by all
Member States. This is a clear deterioration of the situation
and makes it increasingly unlikely that the target figure of
1,5 % will be achieved by the end of the year 2000.

6.6.
The Committee would also draw attention to the
question of the duration of validity of EU rules; it urges that in
all cases, and particularly in areas undergoing major change,
new rules have a limited lifespan with deadlines being set for
the compulsory review of the text in question or, should this
condition not be met, the repeal of the measures.

6.7.
The Committee wishes to draw very special attention
to the direct role to be played by the economic and social
partners in bringing about a successful simplification policy in
the EU. This means:

taking advantage of the areas of contractual freedom
6.7.1.
made available to them under EU legislation, in particular in
the social field;

6.7.2.
pressing for the introduction of new areas of contrac-
tual freedom, self-regulation or co-regulation and areas which
may be covered by codes of conduct at European level,
particularly in the fields of environmental protection, con-
sumer interests, e-commerce and the information society;

signalling their readiness to participate directly, as
6.7.3.
partners, in the implementation of a new type of Directive,
under which it would be their direct responsibility, rather than
that of the Member States, to enact a number of fundamental
requirements through agreements and the use of labels and
certification and self-regulation procedures;

6.7.4.
playing an active part in SLIM projects for which
they are in a position to make an equal contribution to that of
experts appointed by the administrations;

6.7.5.
facilitating the development of test panels comprising
representatives of the players directly involved, namely enter-
prises, trade unions and consumer associations.

The Committee urges that this multiannual simplifi-
6.8.
cation plan be backed by the introduction of codes of conduct
for the EU institutions and the Member States, which should
commit themselves to:

6.8.1.
adopting a general pro-simplification culture, thereby
supporting the expectations of socio-economic users and
representatives of civil society;

6.8.2.
playing an active part in the simplification process as
well as in the regulatory process by adopting new methods for
preparing rules, defining their contents and implementing
them;

6.8.3.
laws and regulations.

ensuring that national laws are compatible with EU

6.9.
The Committee highlights the key role to be played by
the Commission in ensuring the success of simplification
policy. With this aim in view, the Committee makes a number
of recommendations:

The Committee considers that

6.9.1.
the Commission
should draft an ambitious and innovative simplification plan
for the Stockholm European Council in the spring of 2001,
covering the Commission’s current term of office, namely the
period 2001 to 2005. This plan should enable the European
Council to initiate a comprehensive process for simplifying the
rules, as recommended by the Committee in this opinion. The
Committee also considers that the Commission should submit
an annual report to subsequent spring European Councils,
reviewing the progress made, together with scoreboards, and
outlining proposals for new initiatives or for reorienting
existing initiatives to respect the 2001-2005 multi-year time-
table.

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The Committee considers that

6.9.2.
the Commission
should place particular emphasis on the need to simplify rules
in connection with its own internal reform aimed at creating
an administration that excels; priority should be given to the
central simplification unit which should be provided with all
the requisite resources in view of the priority to be given to its
role, and attached directly to the General Secretariat of the
Commission since the need for simplification concerns all of
the Commission’s departments, irrespective of the fields in
which they operate.

6.9.4.4.
Lastly, the Committee proposes that the impact
assessments be made public and that they should accompany
draft provisions throughout the legislative process so that at
each stage the joint decision-makers can assess the extent to
which the amended draft conforms to the impact assessment
criteria. Publicising the impact assessment will also help to
evaluate, on a regular basis, whether a given draft provision
has become obsolete and no longer actually meets the criteria
which originally justified its adoption.

The Committee considers it vital that budgets be
6.9.3.
allocated for the simplification plan to give it sufficient
resources to succeed, and that representatives of civil society
also be involved, in order to provide a more reasoned and
well-founded response to the issues raised in the impact
assessment.

6.9.5.
The SLIM projects should be continued and extended,
ensuring — as the Commission has expressed its intention to
do — that draft rules which are revised in the light of these
projects are submitted no later than six months after the
publication of recommendations in a SLIM report.

6.9.4.
The Committee highlights the importance of the
impact assessment, which must remain a prerequisite for all
new draft rules. The Committee calls for this assessment to be
strengthened by introducing the four innovations set out
below:

Greater use should be made of ‘test panels’ which
6.9.6.
should also involve, depending upon the subject matter,
representatives of the social partners and consumers; steps
should be taken to ensure that the panels receive all the logistic
support they need to work properly.

6.9.4.1.
The Committee draws attention to the need to
make the impact assessments more independent and to
enhance their quality by ensuring adequate funding, use of the
right methodologies and effective consultation of the socio-
economic players directly concerned. One good approach
would be for the Commission to entrust the impact assess-
ments to an external body having the requisite qualifications
and meeting the necessary criteria of independence.

The Committee proposes that

6.9.4.2.
the preliminary
monitoring of respect for the subsidiarity principle be backed
up by a further test to determine whether there are alternative
courses of action: this implies that, rather than simply seeking
to justify the case for action at EU level, checks should also be
made to determine whether the desired goal can be achieved
by other means than the adoption of new rules by the EU
institutions. The possible alternatives could be codes of
conduct for enterprises or socio-economic interest groups,
contractual approaches as used in the social dialogue (in
fields such as the environment, consumer protection and e-
commerce). Where appropriate, these alternatives could also
take the form of measures which are neither regulatory nor
contractual, such as training measures, more systematic use of
legal procedures or the provision of support to civil society
associations which could help to achieve a given objective.

6.9.4.3.
The Committee proposes that the impact assess-
ment should in future include an explicit analysis of how the
proposed new rules will improve simplification, including in
terms of the cost or time saved by the public. The assessment
should cover the aim and contents of the proposed measure
and also its implementation; this would justify attaching
considerable importance to the way in which the measure is
actually implemented.

6.9.7.
The Commission must promote a general environ-
ment which encourages a culture of simplification by (a)
alerting elected representatives to this requirement, (b) training
officials (primarily in its own departments), (c) organising
seminars in this field,
(d) encouraging benchmarking of
national best practice (and publishing the results on the
Internet), (e) developing cooperation with other international
bodies, such as the OECD, and (f) supporting initiatives by civil
society, foundations and think tanks which may help to instil
this new culture of simplification at EU level and national
level.

6.10.
As the only assembly which represents the full range
of ‘users’ of EU rules, the Committee recognises the important
role which it is called upon to play in a new European policy
on simplification; from the standpoint of the ‘users’, the
Committee certainly has a key role to play here.

6.10.1. With a view to enabling it to exercise this role
satisfactorily, the Committee asks the Commission:

to consult it, wherever possible, at an earlier stage
6.10.1.1.
in the procedure so that
the added value provided by
the Committee’s advice on simplification is not seriously
compromised by the fact that the co-decision making insti-
tutions are consulted at the same time;

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6.10.1.2.
in particular, to consult it each year, on the
occasion of the presentation of the Commission’s annual
indicative programme of referrals to the Committee, on the
preparation of the report for the spring European Council on
progress with simplification; this will enable the Commission
to involve the Committee in the definition of new priority
initiatives, such as the scope of new SLIM projects or issues
that merit the use of test panels;

6.11.6.
to speed up, prior to EU enlargement, the adoption
of a number of simplified measures not yet provided for the
users of the single market, such as an EU patent, an operational
statute for a European company, a straightforward VAT system
for intra-community trade, the removal of double taxation
within the single market, and the introduction of Directives to
facilitate mergers and the restructuring of enterprises at
European level.

6.10.1.3.
and strengthening the impact assessment.

to directly involve it in discussions on improving

6.12.
The Committee also highlights the role to be played
by the legal authorities at both EU and national level and also
by the Ombudsman, in helping to promote simplification by:

6.10.2. With a view to making an effective contribution to
the simplification policy, the Committee is ready to play its
full part in the codes of conduct which it is proposing that the
EU institutions adopt. To this end the Committee signals its
readiness to follow the guidelines set out in the conclusion to
this opinion.

helping to bring pressure to bear on the EU
6.12.1.
institutions, governments and parliaments to take steps to
properly clarify the legal provisions and rules which they have
the task of interpreting and enforcing; and

Turning to the role to be played by the co-decision-
6.11.
making bodies in the simplification policy, the Committee
calls on the European Parliament and the Council to:

6.11.1.
support its demand to be consulted at an earlier
stage, thereby enabling these two bodies to benefit from its
opinion at the beginning of the co-decision-making stage;

6.11.2.
to entrust it, where appropriate, with exploratory
consultations in areas linked to the simplification of rules; this
could include asking the Committee for its views on complete
or partial alternatives to the introduction of rules which are
currently in the pipeline and its views on the prospects for
involving economic and social players in the implementation
of a particular Directive;

6.12.2.
contributing to the debate on the increased consoli-
dation of texts with a view to achieving greater simplification
for the benefit of courts, legal practitioners and all other ‘users’
of the rules.

The Member States have a key role to play in
6.13.
ensuring the success of a simplification policy. To this end the
Committee calls upon them to:

6.13.1.
adopt codes of conduct for the simplification of the
operation of the single market and that they ensure that
national provisions are ‘euro-compatible’;

6.13.2.
adopt a more disciplined approach over the time
taken to incorporate EU provisions into national law, recognis-
ing that they now have a duty to show a clear example to the
applicant states;

to authorise funding to enable the Commission to
6.11.3.
formulate analyses and methods which could further the
success of a simplification policy;

6.13.3.
functioning of mutual recognition;

create more propitious conditions for the proper

6.11.4.
to undertake to reach a decision no later than
12 months after the submission by the Commission of revised
draft rules under the SLIM programme;

6.11.5.
to verify, throughout the conciliation procedure,
that their endorsement of draft legislation respects the criteria
set out in the impact statement i.e. that it meets the expec-
tations of users; and

accept direct responsibility for facilitating the oper-
6.13.4.
ation of the single market, following on from the initiatives
already taken in the 15 Member States to set up coordination
centres for the internal market. The Committee calls upon the
Member States to engage in a joint management of the single
market in partnership with the Commission and other Member
States; to this end, harmonised administrative procedures,
certified by the European Union, should be followed in the
technical barriers; more
following fields:
the
effective mutual recognition schemes; product safety;
environment; anti-corruption measures; and customs cooper-
ation; and

the removal of

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formulate national measures to help further simpli-
6.13.5.
fication policies,
including the development of their own
central simplification units, and to notify best practice to
the Commission to enable it to introduce and disseminate
permanent benchmarking.

7.

ESC code of conduct designed to make a contribution
to the simplification process

In order to make an immediate contribution both to the
simplification process and to the codes of conduct which it is
recommending to the EU institutions, the Committee has
adopted the following code of conduct:

First and foremost,

the Committee undertakes to
7.1.
keep a watching brief on what has to be done to achieve
simplification, and on the quality and efficacy for users of the
draft regulations referred to it.

7.2.
The Committee undertakes to take the necessary steps,
when organising its work, to enable it to respond in good time
to any early consultations by the Commission, the European
Parliament or the Council, when the latter wish in this way to
take greater account of the Committee’s opinions on questions
relating to simplification of the rules.

The Committee decides to draft an annual information
7.3.
report on the progress of the multiannual simplification plan,

Brussels, 19 October 2000.

to contribute to the Commission’s annual assessment for the
Spring European Council.

The Committee agrees to introduce systematic moni-
for each piece of draft

the impact assessment

7.4.
toring of
legislation.

The Committee agrees to draw the attention of the EU
7.5.
institutions to the possible need to steer EU rules towards an
approach based on contractual agreements, self-regulation and
co-regulation, under the supervision of the European legislator,
with the onus being on the socio-economic partners in the
fields and sectors concerned to take appropriate steps to
respond to this expectation within a reasonable period of time.

7.6.
The Committee agrees to establish a dialogue with the
European economic and social players to encourage them to
take on the kinds of responsibilities — particularly contractual
responsibilities — that will enable them to make a direct
contribution to Community provisions.

7.7.
The Committee agrees to establish a dialogue with the
Committee of the Regions in order to establish ongoing
cooperation in this field, particularly with respect to the
regional aspects of simplification.

7.8.
The Committee agrees to establish a dialogue with the
economic and social councils in the Member States so as to
enable them to play an analogous role at national level to the
role which the Committee has set itself at European level, in
order to contribute to the success of the simplification process.

The President

of the Economic and Social Committee

Göke FRERICHS