Better regulation: less is more

How well our economy is doing depends on how well our small and medium-sized enterprises (SMEs) are doing, because 99% of businesses in Europe are SMEs. But European companies, especially SMEs, have been under the increasingly burdensome rules of more and more European legislation.

Europe should be about helping entrepreneurship to grow, not killing it with the paperwork. Cutting red tape does not mean giving up high standards. It means helping the backbone of our economy, SMEs, to grow stronger.

Examples such as the Maternity Leave Directive or regulations on REACH and tachographs show that European proposals in too many cases do not follow the rule of finding solutions as close to the citizen as possible. For example, the administrative burdens of the REACH regulation (on the Registration, Evaluation, Authorisation and restriction of Chemicals) are often too much for SMEs - they have to hire expensive external experts to help them to "translate" the legislation and give them guidance.

Committing to better regulation

A first step in reviewing burdensome legislation-making was the European Commission's Regulatory Fitness and Performance Programme (REFIT), which allows pending proposals to be withdrawn and laws which are outdated repealed. More recently, the work programme for 2015 included about 80 withdrawals alone.

Action is expected to be taken to improve impact assessments, better coordinate the legislative process and to ensure that the principles of subsidiarity and proportionality will be taken more seriously

New plans from the three institutions show even more commitment to ‘better regulation’. It is this week that the Commission will send a proposal for an inter-institutional agreement to the Parliament and Council. Action is expected to be taken to improve impact assessments, better coordinate the legislative process and to ensure that the principles of subsidiarity and proportionality will be taken more seriously, for example.

Establishing a better regulation advisory body

How can we ensure a better legal framework that takes into account the specific needs of SMEs? The so-called SME Test needs to be strengthened and applied consistently and must be part of every impact assessment carried out.

Moreover, we should establish an independent 'better regulation advisory body'. Existing High-Level Groups that focus on better regulation and reducing administrative burden consist of external and national experts. They should be merged and complemented by stakeholders to become such an independent body.

Such a body’s expertise, including on subsidiarity and proportionality, could provide added value in making sure that impact assessments are continuously improved and that red tape is as a consequence reduced. It could facilitate the sharing of best practice and the experiences of existing better regulation bodies at national level, such as those in Sweden, the Czech Republic, the Netherlands, the United Kingdom and Germany.

Europe should be about helping entrepreneurship to grow, not killing it with paperwork. Cutting red tape does not mean giving up high standards. It means helping the backbone of our economy, SMEs, to grow stronger.