A cultural revolution for EU regulation

Better regulation has now become a political mantra in Brussels corridors. It has no opponents and many advocates, but only a small band of specialists approach the subject enthusiastically. Politicians easily declare this objective a 'policy', announcing with the appropriate publicity a programme. Implementation, however, requires the combined effort of many people working assiduously month in and month out. Most importantly, better regulation must be comprehensive, integrating all phases of the decision-making process.

To achieve better regulation requires a cultural change in the approach to legislation of European and national politicians and civil servants. Regulating less and lighter is not in the European tradition. In recent years the EU and several national governments have made regulatory reform a priority. Six subsequent EU presidencies have committed themselves to this cause. And for good reason, bearing in mind that the Dutch government has estimated that the administrative costs alone directly caused by regulation amount to 2.5% of gross domestic product (GDP).

So far, EU institutions have almost exclusively emphasised improving the early stages of decision-making, addressing consultation, the use of scientific advice and impact assessment. Some progress has been made. But there is a pressing need also to consider the end of the process, the transposition, implementation and enforcement of EU legislation. Adopting a directive in Brussels achieves nothing without its incorporation into national law and its ultimate enforcement on the ground.

The problems caused by delay or incompleteness of the process include hindering the completion of the single market and reducing legal security, which in turn leads to reduced trade, investment and entrepreneurship.

Although the European Commission and the European Court of Justice have a role to play, the primary responsibility for implementation and enforcement lies with the member states. Sometimes the delays are technical, but increasingly they appear to be deliberate and politically motivated. Implementation is still seen as an element of confrontation between national administrations and the Commission. Enlargement exacerbates the problem, as not all the new countries have sufficiently effective institutional and judicial systems to cope. But enlargement is not the only cause. The current system contains several structural weaknesses, including:

• the absence of clear political responsibilities at EU level and in the national capitals for proper transposition, implementation and enforcement;
• insufficient involvement of national parliaments and sub-national authorities in the process;
• overstretched workloads of the courts;
• lack of knowledge and practical experience of EU law of many national judges (particularly in the lower and regional courts and administrative tribunals), and;
• the increasing volume and complexity of the acquis communautaire.

The use of directives rather than directly applicable regulations as the main legal instrument for internal market legislation favours the so-called gold-plating phenomenon by member states.

In addition, the Commission is not seen as a strong central enforcement body, both because the internal infringement procedure is over-politicised (decisions are taken at the level of the College of commissioners and are not always based on strict technical reasons) and because it can intervene only in cases of actual infringement, while little can be done to prevent the damage occurring. And when it intervenes, it does so with discretion and selectivity. There is no mechanism seriously to deter member states from infringement and the process is very slow.

Other factors relevant to effective transposition, implementation and enforcement are the quality of the legislation itself and the degree of consensus achieved among the stakeholders. There is a tendency to measure legislative success from the time a directive is proposed by the Commission until it is adopted in the Council of Ministers and the European Parliament. The period that really matters, however, is the time between the identification of the mischief and the ultimate enforcement of the legislation in the member states. The greater the consensus on the directive, the easier and better the implementation and enforcement. Thus effective consultation and active involvement from the outset of all the relevant stakeholders may lengthen the earlier stages of the process but shorten the overall period as well as strengthen enforcement.

The present methods of consultation, more often than not, leave EU officials, politicians and the stakeholders largely dissatisfied. Commission hearings tend to be cumbersome and frequently lack penetrating questioning and dialogue and Commission officials are still exposed to extensive unilateral presentations. Parliamentary hearings are frequently organised at the whim of a rapporteur, with too short notice, sometimes awkward venues and haphazard selection of witnesses and other participants.

The recent withdrawal of a cluster of legislative proposals by the Commission is to be welcomed but not the manner in which it was handled. There was no external consultation nor explanation given as to the reason and the criteria used for the withdrawal of individual proposals.

There should be an ongoing and systematic process keeping proposals under review. Sunset clauses or provision for re-examination should be included wherever possible, and there should be ongoing ex-post evaluation of adopted legislation.

Recommendations:

• more time should be spent on consultation and ensuring that the stakeholders 'buy in' to the process;
• the Commission should create a 'hearing officer' (following the precedent of the competition directorate- general) who would see that hearings were properly organised and chair the hearings themselves
• a clear set of rules should be established for Parliamentary hearings with their responsibility falling upon the chair of the appropriate committee and the hearing being chaired by a member able to apply strong direction, rather than the rapporteur (attention is drawn to US congressional hearings), and;
• there should be an ongoing review process of legislative proposals and adopted legislation, as well as mechanisms for early notification of implementation measures.

Better EU regulation needs unambiguous objectives, a clear definition of roles and responsibilities, accountable and comprehensive procedures, and adequate resources. Only then will we have a real and effective policy.

• Stanley Crossick, is founding chairman and Lorenzo Allio is better regulation co-ordinator, European Policy Centre. They write here in a personal capacity.

Major commentary feature in which the authors take a look at the European Commission's recent initiative for 'Better Regulation'. They suggest that to achieve better regulation requires a cultural change in the approach to legislation of European and national politicians and civil servants. They identify structural weaknesses in the present system and give recommendations on how to improve the legislative process.