Red tape ‘costs Europe €360 billion a year’

UNNECESSARY red tape is costing European business €360 billion a year and much of it is there to keep special interest groups happy, according to a high-level report.

About half of the cost comes from rules in national legislation, and the rest from EU laws.

Some of these can be described as gold-plating by member states, where they add rules of their own onto EU legislation, often to suit local businesses.

A bureaucracy check by a European Commission high-level group over the past two years has looked at a range of EU legislation and found red tape could be cut by about a quarter in the next three years, saving businesses €40bn a year.

Enterprise Commissioner Gunter Verhoygen, who set up the study, said it found a lot of the rules had nothing to do with running a better business. They were included to facilitate groups that had lobbied to have their concerns taken into account or to make life easier for civil servants in the commission and member states.

The cost-cutting project, the first of its kind in the world, has been criticised as just a way to leave consumers with less rights.

Mr Verhoygen denied this, saying it was not deregulation.

He said: “This would be one of the worst things to do – we do not want to reduce the level of protection.”

What was needed instead was smart regulation, he said.

Action has already been taken to cut the cost of EU red tape by a quarter and approval of the changes is being awaited from the European Parliament and national governments. The high-level group will continue to recommend changes, many of which have come from the 400 suggestions from citizens and business.

Commission President José Manuel Barroso has promised to make cutting red tape a priority for his next five-year term.

The high-level group includes Jim Murray, a former director of consumer affairs and fair trade in Ireland and of the European consumer organisation BEUC.


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