On Monday, Austria’s Permanent Representation to the European Union published a declaration from the Alliance for the Reduction of Bureaucratic Burden at Member States Level (ARBB), backed by 16 member states.
It calls for ‘simpler, more coherent and less burdensome’ regulation that supports EU competitiveness. The principles in the declaration include a commitment to reducing the bureaucratic burden to improve competitiveness, promoting simplicity by design approach to new legislation and evidence-based law making that regularly reviews the existing rules already in place.
Austria’s Europe Minister Claudia Bauer fleshed it out further, saying the alliance is calling for a European Year of Consolidation and Implementation that aims to implement and enforce legislation that has already passed, rather than start new legislative initiatives.
This push appears to have been timed to reinforce the message from Ursula von der Leyen’s State of the European Union speech during which she criticised the member state practice known as ‘gold-plating’.
Gold-plating, which is also condemned in the ARBB declaration, is the practice of member states adding additional rules, requirements or obligations on top of what is set out in an EU directive. This creates divergences between member states that makes it more difficult for companies to operate without friction in the EU’s single market.
Austria accepts that it, along with other countries, have often contributed to this problem in the past, so it is an acceptance that the EU’s competitiveness problem is not just down to bureaucratic EU regulations, it is a member state issue too.
Nonetheless, the declaration is laying down the gauntlet to the EU’s political leadership that the bloc needs to show it is serious about its competitiveness push. This means reining in its own instinct to always push for more legislation as the answer to everything.
Does this have implications for the EU’s budget?
One EU-wide policy that cannot be put off, and that the EU leadership is desperate to see agreed this year, is the Multiannual Financial Framework (MFF). This is the EU’s seven-year budget and member states have vastly different opinions about the direction it should go in.
So the Austrian-led push for simplification to support competitiveness can be tied to the priorities they will be pushing for during these fraught budget negotiations.
Austria is part of the ‘frugals’ group of EU members that are pushing for substantial cuts to the budget and want to prioritise spending aimed at improving the bloc’s competitiveness.
On the other hand, the ‘Friends of Cohesion’ group are uniting to protect the higher budget settlement that was initially proposed by the European Commission.
This is the fight that EU capitals are gearing up for and it may be the case that Austria’s simplification push can be viewed in that context.
However, the broad coalition of member states who have signed the ARBB declaration indicates that the simplification drive extends beyond the usual boundaries of frugal nations calling for restraint on one side and the newer member states seeking fiscal expansion on the other.
While Austria is leading this simplification charge and is joined by traditional frugal allies such as Germany and Denmark, the majority of the 16 backers of the ARBB declaration are in the Friends of Cohesion group.
This should demonstrate to EU leadership how serious member states are taking this push for a reduction in bureaucracy. The coalition of member states supporting it span across the traditional EU dividing lines.
EU Commissioner for the Economy and Productivity; Implementation and Simplification Valdis Dombrovskis joined the launch of the event earlier this week, so the declaration is not meant to be an attack on the Commission.
But as the legislative engine of the European Union, it is the Commission itself who can have the biggest impact on whether the European Year of Consolidation and Implementation is implemented in practice.
Businesses are ultimately the ones who have to shoulder the burden of costly regulations and are also the primary driver of economic growth. Entrepreneurs will be hoping that the Commission reacts appropriately to the alliance’s simplification drive, so that they can deliver on the economic growth Europe desperately needs.
What directives could be paused?
It is not clear how extensive Austria’s call for a 12 month pause in new EU laws would be and if it includes proposals published by the Commission but not yet approved by all relevant EU institutions.
The EU KIDS Act which bans under 13s from social media or the updated Medical Devices Regulation are examples of this. What seems more likely is they are referencing legislative proposals that are currently being developed by the Commission but have yet to be published.
The Digital Fairness Act and the new Tobacco Products Directive are examples that fall into this camp. The EU Commission is on record confirming these proposals are being developed, but the final version has not yet been published.
It would seem to make more sense that Austria’s call applies to the latter, given that many important directives that have already been published are designed explicitly to improve competitiveness.
Proposals to realise the Savings and Investment Union are already published for example, so pausing the progress on these rules would not seem to align with the alliance’s declared goals.
Whatever the scope of Austria’s call for an EU-wide regulatory pause, stakeholders will be watching to see what happens next.
