Brussels kicks off a season of red tape destruction

Brussels kicks off a season of red tape destruction

The European Commission is waging war on bureaucracy in its effort to boost the EU’s struggling economy. Here’s what to watch.

By JAMES FERNYHOUGH
and MARIANNE GROS

Illustrations by Ricardo Tomás for POLITICO

After a summer sharpening their axes, bureaucrats and lawmakers are back in Brussels for an autumn of destruction.

Their victim: red tape.

A forest of European Union rules and regulations faces the chop over the coming months under the banner of “simplification,” a watchword of Ursula von der Leyen’s second term as European Commission president.

Laws on the environment, agriculture, defense, financial services, chemicals, artificial intelligence and transport are all up for simplification. Much of it will be done through so-called omnibus legislation that opens existing EU laws and strips out anything deemed overly burdensome.


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Meanwhile, a horde of proposed laws could be scrapped altogether. Departments across the Commission have been asked to compile a kill list of bills that have been stuck in the legislative process for more than two years, with a view to withdrawing or revising the ones that don’t fit with von der Leyen’s new agenda.

The idea is that this will free European businesses to compete with their less heavily regulated counterparts in North America and Asia, giving a much-needed boost to Europe’s struggling economy.

“We need to make it easier to do business in Europe, to innovate in Europe, and to embrace the newest technologies,” von der Leyen said last November at the beginning of her second term — and has not wavered since.

But this simplification drive of the Commission, which holds lawmaking power, has proved controversial, exposing a left-right divide that was papered over during the more bipartisan and climate-focused agenda of von der Leyen’s first term.

Business is delighted with the shift in priorities. “Doing better with fewer and clearer norms is what European companies of all sizes are asking for,” BusinessEurope Director General Markus J. Beyrer said following the announcement of the first omnibus bill.

But groups on the left, who see “simplification” as a euphemism for deregulation, worry the EU is in a race to the bottom spurred by the rise of the right in Europe and a radical deregulatory agenda in the U.S. under President Donald Trump. At stake, they argue, along with a handful of EU member countries, is the green transition, human health and even financial stability.

Denmark, which has the rotating presidency of the Council of the EU until the end of the year, has embraced the simplification agenda wholeheartedly. France and Germany, the EU’s two biggest economies, are also gung-ho about simplification, saying it is essential to “unleash our companies’ full potential.”


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René Repasi, a German member of European Parliament with the center-left Socialists and Democrats grouping, told POLITICO he is “not against” simplification, but worries it is happening too fast. “We have a sophisticated legal system in the EU. Simply cutting elements out of it with fast pace and without proper consideration of the overall implications will create more harm than good,” he said.

But like it or not, the big trim is happening. Here’s POLITICO’s guide for what to expect in this season of carnage.

Von der Leyen’s big green U-turn

Pro-environment reform was the great legacy of von der Leyen’s first term. Perversely, it’s the environment that’s first up on her simplification chopping board.

The original omnibus bill, unveiled in February, drastically cuts rules forcing companies to disclose their own and their suppliers’ impact on the environment.

Legislators will negotiate the final text of the law over the coming months, with hopes for a deal by Christmas. If passed, the bill would bring the number of businesses covered by these environmental obligations down by a whopping 80 percent. It would also cut a requirement for big companies to have a climate transition plan, reduce the scope of a carbon tax on imports and make it harder to hold companies legally accountable for environmental damage in their supply chain.


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But the bill is still mired in controversy. Green groups and many left-leaning lawmakers hate it, and the Commission is currently under investigation by the EU’s maladministration watchdog under charges it neglected proper assessment before taking an ax to them. 

Meanwhile, a second environmental omnibus bill, expected as soon as October, intends to propose sweeping cuts to laws on waste and pollution. A review of investors’ sustainability disclosure obligations is also due before year end.

Shoot first, ask questions later

With war on its doorstep in Ukraine and an increasingly unreliable partner in the U.S., Brussels has put defense before pretty much everything. Its “defense readiness omnibus” proposal, released in June, promises to slash rules and regulations that get in the way of the bloc’s grand rearmament program. The bill would include easier access to grants and a fast-track system for permitting infrastructure projects relating to defense. The proposal is now being debated by EU countries and Parliament.

The Commission is also preparing an omnibus proposal to simplify rules for military-grade transport, reviewing all existing EU legislation affecting military movements. Measures under discussion include easing rules on transporting dangerous goods, speeding up troop and equipment movements during emergencies, and making it easier for countries to club together to make military transport purchases. That text is expected by the end of this year.

Farmers and chemicals

The farming lobby has long punched above its weight in Brussels. No surprise, then, that the Commission promised farmers savings of €1.6 billion per year with its omnibus proposal announced in May, giving them time to focus on what matters most — “farming, not forms,” as Economy Commissioner Valdis Dombrovskis put it at the time.

Measures in the package included requiring only a single annual spot check for environmental compliance — and, in some cases, considering national legislation as equivalent to EU law, which would remove a layer of complexity.

Yet other aspects of the overhaul have faced criticism for loosening green regulations. Changes to protections for rivers and permanent grasslands are particularly controversial.


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The likeliest resistance to this would come from the Green members of European Parliament. The hope is to get it done by the end of this year.

Beyond that, the Commission has flagged it’s planning another “cross-cutting” agriculture omnibus that could be extremely broad — and extremely controversial.

The chemicals sector, another formidable Brussels lobbying force, is set to be a major beneficiary of the simplification drive. A chemicals omnibus bill, put forward in July, proposes relaxing restrictions on cancer-causing substances in certain cosmetics and requiring less-detailed health warnings on packaging — to much criticism from health advocates. The text is being debated by lawmakers and EU countries this fall.

Meanwhile a revision of the chemical safety framework, REACH, due before the end of the year, is gearing up to be a major brick in the wall of simplification, and will occupy legislators for many months to come.

AI and finance

The EU has been caught between the need to properly regulate artificial intelligence through its world-leading AI Act and a desire to boost innovation to catch up with the U.S. and China.

Right now, the deregulation agenda has the upper hand. The Commission has said it will look into cutting reporting obligations on AI, data and cyber. But the big fear among tech safety advocates is that the Commission will use a technology omnibus to reopen the EU’s AI Act, which was adopted only last year, amid calls that the bloc should be more competitive.


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There’s also a push to loosen some of the strict financial rules that were put in place after the 2008 global financial crisis.

Securitization, which involves the packaging and selling of debt to third parties, was a key contributor to the 2008 euro crisis, and EU regulators clamped down on this practice in its aftermath. The Commission has proposed loosening securitization rules to free up banks’ balance sheets so they can lend more, and also reducing capital requirements for insurers. The aim would be to get more money flowing around the EU, stimulating economic activity. That proposal is at the beginning of the legislative process.

Max Griera, Pieter Haeck, Douglas Busvine, Lucia Mackenzie and Martina Sapio contributed to this report.

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