Debate: Reducing regulatory burden to unleash entrepreneurship and competitiveness
Date: WEDNESDAY, 22 NOVEMBER 2023
Speaker: Maroš Šefčovič
Language: EN

This is an important effort to support our entrepreneurs and businesses, which have faced numerous challenges in recent years, from the pandemic to high inflation and the energy price crisis, alongside wider societal changes such as the twin green and digital transition. In the new geopolitical context and amidst strong global competition, it is crucial that we look at boosting all factors that drive economic growth and sustainable competitiveness.  Our March communication on long-term competitiveness highlighted that the growth enhancing regulatory framework is a central part of this, and it announced our goal to streamline reporting obligations and reduce its burden by 25%. We made it clear that these efforts will not undermine our policy objectives, such as tackling the climate crisis. Rather, they will give fresh impetus to our efforts to simplify and cut unnecessary burdens. The less red tape they are faced with, the more our businesses, and especially our SMEs, can focus on building sustainable growth.  To follow up on the communication, reducing burden was made a top priority in our 2024 Commission work programme, which we presented last month. It included 26 new rationalisation proposals, in addition to the 15 we had already adopted between March and October. With the data already available, we have estimated that the proposals could bring EUR 3.6 billion in cost savings, while total cost savings of all 41 proposals is estimated to be even bigger.  Let me give you some examples. First, the reform of the Union custom code is expected to bring EUR 2 billion in savings by cutting burdens related to customs and VAT reporting for traders, including by providing one single EU interface and facilitating data reuse. Second, it is estimated that a proposal for the revision of the regulation on European statistics will save a further EUR 450 million. Third, we have proposed to postpone the deadline for adoption of the sector-wide European sustainability reporting standards. This will give stakeholders more time to adapt to the new requirements, and we also adjusted the thresholds of the accounting directive so that more than a million companies will benefit from the simpler reporting requirements. Moreover, the work programme includes 16 evaluations and fitness checks of existing legislation and they will help us to identify further potential to reduce administrative burden and look at cumulative costs.  Honourable Members in order to carry this work forward, we will seek to engage more closely with our businesses and stakeholders. First, we launched a call for evidence last month asking stakeholders for their input. We will also pursue targeted consultations with, amongst others, companies, SMEs, the SME envoys network and Member State experts. And second, I have asked our ‘Fit for Future’ expert group to contribute to this exercise. Third, each Commission Directorate-General will prepare targeted plans for 2024 and beyond. We will report on the progress made on cutting burden from reporting requirements in the next annual burden survey.  This focus on existing burden is complemented by our efforts to limit new burden. For instance, our ‘one in, one out’ approach acts as a cost break for new proposals. It means that we offset newly introduced burdens by removing equivalent burdens, ideally in the same policy area. The last annual burden survey, published together with our SME relief package in September, reported about the first year of full implementation of this approach, and it shows that the overall expected savings from the 2022 proposals, once adopted by co-legislators, would amount to EUR 7.3 billion, providing significant relief for businesses and citizens.  While we already have a top-notch better regulation framework, we also made ensuring its systematic and systemic application a priority. We introduce a new mandatory competitiveness check in all impact assessments and strengthen the SME test and the regulatory scrutiny board. Together with the incoming EU SME envoy, this would ensure greater focus on the impact on businesses, especially SMEs.  We are also developing a more innovation-friendly approach to regulation through the greater use of regulatory sandboxes and testbeds. Better law-making is, of course, a joint effort and we will need your support, together with that of the Council, to make sure that our EU laws are simpler, more targeted and easier to comply with in order to boost the competitiveness of our businesses.  And finally, Madam President, I want to mention the series of clean transition roundtables with industry we are organising in order to remain fully engaged with those who are at the core of the implementation of the Green Deal. The first one was held in October with a focus on hydrogen, with further ones to follow soon. We are also holding a series of green dialogues with citizens, local authorities, social partners and other stakeholders as part of our efforts to ensure a just transition. Together, I believe we can make a real difference that will be felt by our businesses and our citizens.