Too many rules ‘damage business’

EUROPE is doing severe damage to its business environment and costing jobs by piling on too many regulations, says IBEC president Maurice Pratt.

Businesses in Europe struggle under much higher regulatory imposed costs compared with the United States or the Far East and it is costing us jobs, said Mr Pratt.

Mr Pratt was addressing an IBEC conference in Dublin which asked: Is Regulation Killing Business?

Dealt with from an European Union and American perspective, the conclusion was a resounding “yes.” At this stage, about 50% of Irish legislation is generated by the EU.

IBEC wants Europe to strike a greater balance between adequate regulation and a supportive business environment, he said.

It took four days on average to start a business in the US against a 38-day average in Europe.

The cost of starting a business is 12 times higher here, the conference was told.

Another key distinguishing factor between the two economies, that combined, account for 40% of global trade, is the cost benefit analysis carried out on each piece of legislation before it is given the green light in the US.

If the regulation fails the cost benefit analysis in the US, then it is scrapped, delegates were told. Key speakers included Uniliver chairman Niall FitzGerald and John Morrall of the White House.

Taoiseach Bertie Ahern opened the conference.

“Better regulation and EU-US perspectives are foremost in my mind these days. Better regulation is a core theme of our EU presidency and featured prominently at the recent Spring Economic Council,” he said

Mr Ahern also said the EU and the US faced many similar challenges concerning the economy, trade, technological developments, social capital and security.

“In that context, regulatory reform was an issue if properly tackled could yield immense momentum to the huge level of trade existing between the two economic powers,” said Mr FitzGerald.

ACTAL in the Netherlands has been set up to tackle the regulatory problem. There the goal is to cut regulation by 25% between 2003 and 2007. The chairman of the agency, Robin Linschoten, told delegates about 40% of Dutch regulation originates in the EU.

If the red tape is cut it could boost GDP by 1.5% and jobs growth by 1.7% over the period, he said.

“Progress could come at a political price, but the long-term economic benefits are indisputable,” said Mr Linschoten.

Both IBEC and its Dutch counterpart, the VNO, have agreed to target this key competitiveness issue during their respective presidencies.

“This high-level conference is a step along a road from which we must not waver”, he said.