Valdis Dombrovskis är EUs kommissionär för ekonomi och produktivitet, implementering och förenkling. Regelbloggen fick möjlighet att ställa några frågor om regelförbättringens betydelse för EU och Kommisionens mål för den innevarande mandatperioden.

Why is better regulation important for the European economy?

Better regulation helps to ensure high quality of the Commission’s policy making. It provides that policies are based on an impact assessment, evaluation and stakeholder consultation.

According to the OECD survey, the Commission’s Better Regulation policy ranks among the best in the world.

This is important because with rapid technology and societal progress, policies should be developed based on the best available expertise and evidence. This includes the best available data, up to date views from relevant stakeholders, robust analysis to support the policy and inform policy makers as well as independent scrutiny. In this way, better regulation helps to create confidence in European policy making and to reduce unintended consequences. This is important to make policies work for society and Europe in the best way possible. Better Regulation also helps to find the most efficient solutions, thereby minimising the cost to society of implementing policy objectives. This includes minimising administrative costs for businesses, allowing them to focus on innovation and competitiveness. Generally, coherent, predictable and evidence-based policies can create a competitive advantage in a world were uncertainty and unpredictability are particularly high.

What is at the top of the better regulation agenda during your term?

As mentioned, the pace of technological change is accelerating, trade tensions are rising, and the geopolitical landscape is shifting. In this context, securing our prosperity and preserving our values depends on our ability to innovate, compete, and adapt. That is why the Commission has made enhancing Europe’s competitiveness a top priority in this new mandate, while staying the course on the Green Deal. Creating a favourable business environment and ensure that companies are not stifled by excessive regulatory burdens will help to regain our competitiveness and unleash growth.

Cutting red tape is one of the crucial elements to achieve a more competitive Europe. The current reality is that over 60% of EU companies see regulation as an obstacle to investment, with a significant 55% of SMEs flagging regulatory obstacles and administrative burdens as their greatest challenge. Simplification, implementation, and regulatory burden reduction are indispensable pieces of the competitiveness puzzle.

We are therefore pursuing an ambitious target of reducing administrative burdens. The Commission set out highly ambitious targets for the new mandate to reduce administrative burdens by at least 25% and by at least 35% for SMEs. Meeting the burden reduction goal will require cutting recurring administrative costs by EUR 37.5 billion by the end of the mandate with dedicated measures for SMEs.

For this purpose, we are stress-testing the EU acquis through an ambitious and comprehensive screening of existing EU legislation to identify overlaps, contradictions, and obsolete provisions. I am coordinating the work of the whole College of Commissioners to make sure that this exercise is done thoroughly. This is based also on new tools of consultation, called implementation dialogues with each Commissioner and reality checks. Using reality checks, the Commission is reaching out to practitioners to identify and solve practical issues. For example, those linked to authorisations, permit granting or compliance burdens. The outcome of the reality checks will inform the stress-testing of legislation and the design of future simplification proposals.

We have adopted two Omnibus proposals on sustainability reporting and investment, together with a simplification of the carbon adjustment mechanisms. The proposals are conservatively estimated to bring total savings in annual administrative costs of around EUR 6.3 billion and I am pleased that both co-legislators are acting swiftly to adopt them. Other omnibus and simplification proposals are in the making designed to implement simplification and produce cost savings for businesses.   

The Commission has announced that it will propose to the EP and the Council a simplified adapted method, based on the Standard Cost Model (SCM) method, to estimate the costs of significant changes to the proposals to be negotiated. What are your expectations of the EP and the Council regarding their work on impact assessments?

The Commission is calling for a better implementation of the Interinstitutional agreement. While the spirit of the agreement is for better regulation to be a joint effort, on some provisions the co-legislators have not fully implemented it. 

According to the agreement, the European Parliament and the Council will, when they consider it appropriate and necessary for the legislative process, carry out impact assessments in relation to their substantial amendments to the Commission’s proposal. However, co-legislators do not assess impacts of substantial amendments, or not sufficiently. 

We need to operationalise the commitment under the Interinstitutional Agreement on Better Lawmaking to assess the impacts of their substantial amendments.

We understand that amendments cannot be subject to a full impact assessment in the tight time frame of negotiations. But it should be possible for each institution to apply a simple methodology to assess their costs, based on the so-called Standard Cost Model. We will put forward suggestions to the co-legislators on a simple methodology for assessing the impacts of their significant amendment. 

Moreover, simplification is a joint effort for EU legislation from proposal, through amendments, to adoption.  The European Parliament – together with the Council – need to play their part.  We all must take responsibility to make simplification and implementation a success. Hence, we invite the co-legislators to fast-track initiatives with a significant burden reduction angle without reopening other unrelated issues. 

The bottom line is that we need to deliver better and simpler regulation, and we need stakeholders to feel it on the ground, swiftly. We should stop discussing principles and step into action. We have concrete proposals on the table and we should now work together to make them reality.

Mario Draghi mentions in his report that the USA has had a higher growth rate than the EU in recent years and has a stronger position in terms of investments in high-tech sectors. Furthermore, he suggests that the EU should therefore focus on structural reforms and higher productivity. EU’s response to this among others is better regulation. At the same time, the new administration in the USA has specifically highlighted regulatory simplification as a priority area. Do you therefore foresee increased institutional competition between the EU and the USA, and do you believe that the EU is well-prepared for it?

I agree that we should focus on structural reforms, higher productivity and simplification. This is what we have committed to with the Competitiveness Compass. Regulatory simplification is an important tool in this endeavour, but it is not the only one. It means for us delivering on the twin transition in an efficient way. We want to improve and facilitate the path to reach our objectives not to renounce to them.   

What do you hope to have achieved by the end of your term?

I hope that, at the end of my term, I will have delivered on the commitment I just mentioned. This will mean that we have managed to reduce the administrative burdens for businesses by 25 %, and 35 % respectively, and made Europe a better and simpler place to do business. The EU stock of legislation, so called acquis, will be stress tested so to consolidate, simplify and facilitate implementations. Rules will have a user-centric approach: competitiveness and SMEs impacts will be even more prominent considerations. The new consultation tools will allow us to have more informed knowledge on implementation and design rules having in mind how practitioners will need to apply them. I want business to feel a notable difference on the ground.

This should work to the benefit of productivity, competitiveness and innovation in the EU, as well as to the benefit of citizens and workers.