Verheugen bids to cut red tape by a quarter

Enterprise and Industry Commissioner Günter Verheugen has suggested that the EU should cut a quarter off the cost for businesses of European regulation by 2009.

Verheugen, who is in charge of the better regulation policy, said that the Commission was working on a method of calculating the cost of regulation on companies, which should be ready by the end of the year.

He said he hoped that the German presidency of the EU would take a decision to set a target for a "quantifiable reduction" in costs. He told the German newspaper Die Welt on 24 July that he had a figure of 25% in mind for across the whole economy.

German Chancellor Angela Merkel also mentioned cutting the administrative costs of EU legislation by 25% in June, while Austrian Chancellor Wolfgang Schüssel tried to insert the same target into the conclusions of the March EU summit.

Verheugen said that a cut of 25% in costs would free up 75 billion euro in the European economy which could be used for research and development efforts. EU gross domestic product could increase by 1.5% as a result, he predicted.

The Commission has been reluctant to commit itself to a target before it has defined a method for calculating the cost of regulation on business.

A spokesman for Verheugen stressed that the Commission was only talking about the administrative costs of legislation, not the compliance costs of meeting targets for standards such as air or water quality.

Verheugen sounded the alarm about slow progress in the Commission in reducing the regulatory burden on EU companies.

While the Commission had aimed to adopt 54 new pieces of legislation simplifying existing rules, it had only approved five of these so far, he said. A further 30 were expected to be adopted by the end of the year, he added.

The Commission had, however, managed to scrap 67 pieces of outdated or unnecessary legislation while no new proposals were put forward without a test to ensure that they did not harm competitiveness or without an impact assessment.

Verheugen said that scrapping laws was harder than devising new ones.

The current Commission had a different understanding of its role than previous ones, he said. "We don't see ourselves as a watchdog for the member states but rather as a service company," Verheugen said, adding that the Commission wanted to get away from the "image of a know-it-all schoolteacher". Instead, the Commission should act as a partner, he argued, although for some officials this approach was seen as "sheer heresy".

Enterprise and Industry Commissioner Günter Verheugen has suggested that the EU should cut a quarter off the cost for businesses of European regulation by 2009.

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