Germany renews campaign against bureaucracy

The German government has updated its 2006 commitment to cutting bureaucracy, in a landmark decision dated 27 January 2010. The courtesy English translation of this interesting document is now posted on this site (not yet available elsewhere).
This is an unofficial summary of its contents for BR experts:
The 2006 federal programme is to be expanded to encompass compliance costs, once the appropriate methodologies have been developped.
New simplification measures will be adopted to reach the 25% reduction target by 2011; ministries will list and assess reduction measures by May 2010; a new federal plan will be adopted in July by the State Secretaries’ Committee;
Six priority areas have been selected including planning, tax declarations, business permits and electronic submission of company registration, citizens' application for services
New burdens created after 2006 will need to be offset by further cuts (net target);
Other measures include expanding the ex ante evaluation of effects of all new federal regulation proposals on citizens, businesses and public authorities, broadening the competences of the National Regulatory Control Council and pressing for similar action at EU level.

UK Business calls for firm line on red tape

Good news: BR is not forgotten in the British election campaign, though the proposals of the main parties may be disappointing, according to a British Chambers of Commerce report, which specifically pinpoints a "failure to take EU legislation into account". See article in Financial Times.

Volcano highlights challenges of regulatory risk management

Stranded BR experts will have had time to reflect on the stakes at play in managing air travel regulatory risks. No doubt there will soon be plenty of literature inspired by recent events. In the meantime, a leading editorial in this week's Economist outlines some of the issues, such as how to plan for such natural disaster risks, in this case how to set a safety level of volcanic ash. In summary asks the editor: "was all this chaos man-made—an immense and costly overreaction by regulators to a spectacle that posed only a minor and manageable risk?"

Commission opens stakeholder consultation on smart regulation

The Commission has just launched an online stakeholder consultation to collect input for a Communication on smart regulation to be published this autumn. The consultation will run from 23 April to 25 June 2010.
The consultation document in 21 EU languages comprises some new indications about the smart regulation approach. Example: "Smart regulation is not about more or less legislation – it is about delivering results in the least burdensome way. Smart regulation will be instrumental in achieving the ambitious objectives of Europe 2020, a new strategy for smart, sustainable and inclusive growth." The 8 questions that stakeholders are invited to address give plenty of room for expert suggestions on how to improve existing and new EU law.

Stoiber group renewed with expanded mandate

Following a working meeting today with Mr Edmund Stoiber, president of the high level group on administrative burdens (HLG), Mr Barroso issued a public statement which is interesting in that it charts a way forward for this key component in the consultation process which underpins the smart regulation agenda. The statement addresses five major points:

• extension of mandate of HLG until 2012 to fully exploit the savings potential of the Action Programme on cutting admin burdens;
• the HLG will prepare a report by November 2011 on best practice of Member States to implement EU legislation in the least burdensome way;
• the HLG will help the Commission to pilot Commission proposals through the legislative process in the Council and the European Parliament;
• the Group will be involved in the Commission's simplification efforts;
• Informal cooperation between the HLG and the Impact Assessment Board.

This represents a significant widening of the competences of the HLG, showing appreciation for the work done since September 2007.

French Senate increases protection for micro-entrepreneurs

The French Senate adopted on 8 April a bill on "individual business with limited liability", which aims to stimulate the creation of new small businesses by introducing a degree of protection of the entrepreneur's own real estate assets which is absent from the existing rules. This reform concerns the company's status, and is separate from measures easing the owner's fiscal status, which has already been simplified in the "auto-entrepreneur" legislation. The scheme introduces a number of simplifications, and setting up such a business will be further streamlined. The bill now needs to be adopted by the national assembly, before it can be enacted with effect from 1 January 2011.

E-invoicing reform approaching EU decision

The European Commission on 28 January 2009 adopted a proposal COM(2009)21 to change the VAT Directive 2006/112/EC (from 28 November 2006) with respect to invoicing rules. The main objectives are to reduce burdens on business, increase the use of e-Invoicing, support small and medium sized enterprises (SMEs) and help Member States tackle fraud. This is by far the most promising item in the Commission's programme to slash burdens on business: the maximum mid-term reduction potential is estimated at € 18.4 billion if all businesses send all their invoices electronically.In the European Parliament, the proposal has been examined by the Legal Affairs Committee: see committee report dated 9 March. Refer to "Procedure file" on Parliament site for further steps towards adoption of the opinion.

16 March: The ECOFIN council agreed a general approach on the draft directive - including the important e-invoicing proposal - and it will be adopted formally in a coming Council (once the opinion of the Parliament has been delivered). See ECOFIN outcome of proceedings for details.

Background material:

• Full independent scrutiny of the "history" of e-invoicing (blog);
• Euractiv background note.

Swedish NNR publishes BR progress report

Most of us have received from the Board of Swedish Industry and Commerce (NNR) the English translation of its "Regulation Indicator 2009". The Regulation Indicator has been published annually since 2002 and gives a business view of the progress of Swedish government in the area of better business regulation. NNR has also published a follow-up to its 2006 report on "The Total Cost of Regulations to Businesses in Sweden". The new report includes information on how changes made to regulations during three years have affected the cost to business of complying with regulation. Results show that changes to financial regulatory obligations have had more of an impact than changes to administrative obligations on the total cost to business.

Comment: this report relates to the recent discussion on the cost of regulation - although unfortunately it does not investigates what is the proportion between EU and national legislation on the overall burden. It states that the Swedish government should make more progress in assessing gold-plating, since assessment practices to date remain partial and ad-hoc (CHM with L. Allio).

Commission defines smart regulation

Experts interested in the newly adopted concept of smart regulation in the European Commission will check the recently published Commission Working Programme for 2010 COM(2010) 135 final, pages 10-11: in the section "Modernising EU instruments and ways of working", smart regulation, defined as an initiative to ensure that EU policies are effective, seeks to ensure "a high quality regulatory framework for citizens and businesses". It proposes ways of "fully connecting and integrating" throughout the regulatory cycle the available "smart regulation instruments". These are listed as: impact assessment, "Simplification, administrative burden reduction and withdrawals" and interventions, including via legal steps, to ensure the full and correct implementation of existing legislation. Other ways of enhancing policy making are improved "Communicating Europe" and "adapting the EU financial framework to serve policy priorities".
The working programme also provides a list of policy initiatives scheduled for adoption in 2010, useful for stakeholders wishing to take part in future consultations.

Is EU law still overwhelming?

Three research publications have recently contributed to the debate, which is still hampered by methodological difficulties and largely influenced by underlying political considerations:

1/ Open Europe: The row over the weight of EU law continued this week following the publication of an updated report by Open Europe  claiming that regulation cost Britain's economy £176 billion (€199bn) since 1998 with £124 billion (€140bn) or 71% from EU legislation. It cost £32.8 billion (€37bn) in 2009 with 59% due to complying with EU rules. Open Europe is known to be close to the British conservative party. See recent post on the conservative blog.

The Commission responded: "The Open Europe study lacks rigour and is intentionally misleading. The headline figures suffer from a methodological bias. It confuses stocks and flows [and] it suffers from double-counting. It does not consider what repealing EU regulations would imply either in terms of foregone benefits or alternative regulatory costs." (reported by Euractiv)

2/ Study by Notre Europe, a Brusels think tank founded by J. Delors, dispels, with unpublished quantitative data, the "myth" that 80% of legislation is of EU origin. It claims that "the impact of EU normative interventions is substantial, yet often incidental or regulatory in scope, and, overall, is not as important as claimed, except in certain specific public policy sectors";

3/ The research project "Europeanizing Legislation" has shown that only 10.6 per cent of all laws in force in Austria originated with the EU. This contradicts the impression that the national legal system is dominated by the EU. As many topical issues can only be solved at the European or international level, the authors of the study are convinced that the EU's share of influence will continue to grow.

EP harnesses BR principles to improve lawmaking

Two recent documents give substance to the Parliament's commitment to BR.

1/ EP resolution on new EP-COM framework agreement

The European Parliament and the European Commission are currently discussing a new framework agreement between the two institutions, which is meant to update and improve working arrangements between them and enhance the quality of EU law.

The resolution adopted on 9 February 2010  sums up the key elements of the future agreement as the EP sees it, to include the following demands:

• Equal treatment for Parliament and the Council of Ministers in access to meetings and information;
• Follow up by Commission on EP legislative initiative requests;
• Cooperation between EP and COM on handling citizens' initiatives;
• Detailed review of Better Law-Making Inter-institutional Agreement;
• Improvement of the accountability of the executive by revised working arrangements;
• Better information of EP in international negotiations (in accordance with Lisbon);
• Improved arrangements for programming legislative work.

 See Euractiv comment.

2/ Cooperation in Better Lawmaking

In the meantime, the Committee on Legal Affairs discussed in March a draft report on better lawmaking (on the basis of the Commisison's 15th annual report on the application of the principles of subsidiarity and proportionality) (2009/2142(INI)). The EP draft report takes into consideration the changes introduced by the Lisbon treaty that replaced comitology by separating delegating and implementing measures, and introduced a European citizens' initiative and expresses a number of views, among which:

• "welcomes the closer involvement of national parliaments in the process of creating European law and particularly in the process of monitoring compliance of legislative proposals with the principles of subsidiarity";
• "undertakes to continue assessing the impact of amendments introduced to the Commission's proposals";
• "calls on the Commission to define precisely the 'smart regulation' agenda";
• The draft report also contains detailed recommendations on the future of administrative burden measurement and reduction at EU level.

For background, see Commission site on BR:  and "relations with other institutions and bodies."  The most recent Commission report on better lawmaking is also on-line.

Thinktank blasts proposal on AIFM

Open Europe published last week a highly critical scrutiny of the AIFM proposed reform, and formulates four recommendations for the improvement of the Commission's proposal (COM(2009) 207 final), based on the Commission's own better regulation principles.

This document contributes to a lively discussion where other stakeholders have already expressed views. For an introduction to the Commission's approach, see the alternative investments page on europa.eu.

From sister blog http://regmat.blogspot.com/ (specialised on quality financial regulation).