Opinion & Analysis

Better regulation in Europe: an action plan for the next Commission

European businesses are far more likely than US firms to cite regulation as a major obstacle to doing business. Not only do firms find it hard to enter markets and expand in the EU, they also struggle to adapt and modernise their businesses. As Europe searches for ways to boost economic growth and frets about its competitiveness, the EU needs to ensure its regulations encourage better productivity and more innovation.

In recent decades, EU leaders have repeatedly committed to the ‘better regulation’ agenda. ‘Better regulation’ is a set of practices to ensure that EU regulations are evidence-based, made in a transparent and inclusive way, and are as simple and targeted as possible to reduce unnecessary burdens. Better regulation supports productivity and innovation by ensuring new laws are properly targeted and well-designed. That means unnecessary compliance costs are minimised, firms remain as free as possible to innovate and experiment, and regulation does not impose barriers on more productive firms mounting challenges to less productive incumbents. 

Delivery has been underwhelming, however. European Commission President Ursula von der Leyen started with strong commitments to better law-making but then had to spend much of her first term overseeing the EU’s response to many crises – such as the Covid pandemic, Russia’s invasion of Ukraine, the energy price crunch, the US and China’s use of industrial subsidies, and the need to respond to climate change. While member-states responded to these crises with surprising unity, they outsourced large parts of their response to the Commission, which has become more powerful than ever. The Commission president responded with an assertive and decisive style of leadership. This has had an understandable, but still negative, impact on the EU’s overall law-making rigour and its role as an enforcer of EU law.

About the Author: 

Zach Meyers is the assistant director of CER. His areas of expertise concern competition policy, economic regulation, industrial strategy, technology and innovation, the single market.

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