Speech Verheugen over Europese regelgeving (en)

SPEECH/06/562

Günter Verheugen

Vice-President of the European Commission responsible for Enterprise and Industry

Exchange of views between Vice-President Verheugen and the Legal Affairs Commission of the European Parliament

Legal Affairs Commission – European Parliament

Brussels, 4 October 2006

I am delighted to have this first opportunity to discuss with you in this Committee the "better regulation" initiative.

We want to have a new legislative culture in the European Union - a modernising impetus that will set our law firmly on a 21st-century foundation. We want European law that is easy to understand and easy-to-use. We want legislation that draws a balance between a framework for society, on the one hand, and individual freedom, on the other, in such a way that it binds the various participants in the community closer together without smothering them.

Therefore, ladies and gentlemen, better regulation does not mean the repeal or watering-down of Community law. Better regulation means modernising this body of law and developing it further. Better regulation means taking account of 21st-century challenges and very closely examining the question of whether and where we need binding common legislation. Where we do need common legislation, we should not hesitate to make it available. We must, however, give up the simplistic idea that more common legislation will automatically create a greater sense of community: those days are gone.

Throughout the European Union, citizens associate the Community first and foremost with a mania for laying down rules. You all know those favourite examples passed around from person to person. You will all also be aware of the complaints voiced in particular by small and medium-sized enterprises which have long felt overburdened, and whose entrepreneurial drive is at risk of being suffocated by a mountain of rules, administrative regulations and procedures.

The vital issue is therefore not whether complaints should all indeed be addressed to the Union, nor whether all allegations are really justified. At such a time, only one thing matters - getting started and grubbing out the roots of the public unease so visible everywhere. If we fail to do so, we leave the way open to the opponents of integration, all those who have no hesitation in dragging the Community and its rules through the mire. If we fail to take seriously people's reservations and the concerns felt by small enterprises in particular about our existing laws, then we will be failing to meet the great challenge of our times - ensuring that the Union's citizens recognise the EU for what it is, namely the guarantor of our future and the key to more and better jobs.

We therefore cannot and must not content ourselves with laws that only the 11 000 or so large companies in the EU can take in their stride, as it were, while causing huge stresses and strains to the 23 million small and medium-sized companies. We need excellence in all fields - and that includes the law.

It is already clear that the drive for better regulation is not a monopoly of the European Commission. All Member States have now signed up to it as a political goal. This initiative does, however, require persistence - and political monitoring. After all, nothing is more alien to a bureaucracy than to cut back on red tape.

Our programme for better regulation comprises three pillars.

The first of these is the screening of legislative proposals submitted by the Commission to the European Parliament and the Council. In the light of the screening exercise, we withdrew a total of 183 proposals over the past year. This year, we are screening some 79 proposals submitted to the Parliament and Council, as legislative bodies, between 1 January 2004 and 30 November 2004. Because this has in the past given rise to discussion, I would like to provide some clarification. There are a number of different reasons for withdrawing the proposal. It may no longer be relevant or it may have become apparent that the necessary support cannot be mustered anywhere. A withdrawal in such cases does not – and I would like to stress this point – mean that the Commission is abandoning its objectives. A withdrawal means that we are investigating why a particular proposal has become "blocked" in the Institutions. It does not mean that we rule out taking new initiatives. What we do not need is proposals that have been pigeonholed for years because they are extremely controversial. We need proposals that can count on majority support.

The second pillar comprises a complete review of existing Community law. This is the real challenge - taking a renewed and critical look at laws that have already been accepted in order to improve them.

One approach is codification – codification does not involve amendments to existing law but only its simplification so that it becomes easier to apply. We are talking here about more than 500 pieces of legislation scheduled for codification by 2008 and which, if we are successful, will render obsolete a whole mass of further legislation. Here again, however, the devil is in the detail. We have two major issues to deal with, of which the first is the matter of language. Codification depends on all language versions being available; from 2007 this also includes Bulgarian and Romanian and in certain cases Irish and Maltese - perhaps relating to legal acts dating back to 1957 for which no Irish or Maltese translation exists. The second problem arises from amendments to legal acts due for codification. The Commission therefore seeks to ensure that legal acts are not modified during the codification process. However, the behaviour of the two legislators, the Council and the Parliament, has a critical impact here. Again and again, codification is rendered impossible by new proposed amendments, resulting in a waste of time, money and effort. I will therefore refer very specifically to this problem in the upcoming statement on better regulation that I am due to present to my fellow Commissioners on 14 November. I would be very grateful if you would take on board this issue.

The second, and more important, approach is the targeted simplification of existing legislation. The Commission set itself an ambitious programme in this area in 2005, involving some 100 initiatives designed to simplify entire fields of legislation.

Implementing this program is proving difficult in that obstacles are being encountered at every turn. To put it bluntly, the results so far are in no way satisfactory. During 2005, we put forward 15 simplification initiatives and we will not be able to implement all of the 56 initiatives that we have planned to undertake in 2006. When the summer break began, a mere 4% had been implemented. President Barroso and I have therefore often stressed this issue to the rest of the Commission, and every Commissioner is under an obligation to act. I can assure you that we will not slacken in our efforts, and I can already tell you that we will be putting forward a new legislation simplification program in November, designed to achieve a targeted reduction in the costs caused by bureaucracy. In a more systematic manner than hitherto, we intend to concentrate our simplification work on key economic fields. Accordingly, we will focus on fields that are both highly regulated and of major economic importance, and where we know from public debate that problems are being experienced with the way legislation is being applied.

Here again, however, nothing can be done without the help of Parliament and the Council. At present, 22 simplification proposals are pending and I would therefore be grateful if both institutions would give priority to the simplification of legislation. Modern European legislation requires every all lights to be set to green, and I would ask for your support in achieving this.

The third aspect of our new policy for modern European law concerns the submission of new proposals. What we need is a long-term, predictable and transparent legal framework that is as simple as possible and that provides support for our policies on growth and employment. We don't need to have a rule for everything, but rather all necessary rules designed to achieve peak performance in the European Union. This is why I attach great importance to a thorough assessment of subsidiarity. I anticipate that consultation with national parliaments, something that the Commission has voluntarily undertaken, will help us to achieve an up-to-date answer to the question of whether and how we should act.

In addition, the Commission has since 2005 consistently chosen the path of the broadest possible public consultation. The real world is complex and we would not be taking proper account of this complexity if the views expressed in relation to a proposal, whether it be related to industry or to the environment, were only those of the interest groups concerned. Take REACH for example. This is a very ambitious and complex proposal, and anyone seeking to polarise the discussion and so focus exclusively on industrial interests or on environmental and health-protection issues would be making a strategic error and would indeed be guilty of gross negligence. Our goal with REACH is to create modern legislation that enhances protection for the environment and public health, while at the same time meeting the needs of the millions of small and medium-sized enterprises which will be required to apply REACH on a daily basis.

One element of the comprehensive consultation process takes the form of the high-level groups that I have set up for key economic fields, such as the automobile and pharmacological industry, or to examine current multi-sectoral issues such as the interrelationships between competitiveness, energy and the environment. In these high-level groups, all the participants - from industry to NGOs - sit at the same table and discuss the needs of the next 10 to 15 years. I am aware that misunderstandings have arisen in the Parliament in this connection, and would like to stress that work of these groups is binding neither on the Commission nor on the Parliament. Our goal is to achieve the broadest possible spectrum that society can offer in terms of experience, knowledge and political awareness and I am therefore happy to renew my invitation for you to take an active part in the work of these high-level groups.

Since 2005, comprehensive impact assessments have been mandatory in the Commission. Legislators should be aware of all consequences, whether political, economic, financial, social or environmental. Such a foundation is a prerequisite for weighing the advantages and disadvantages. Impact assessments will thus help us to conduct the discussion on an objective basis.

For the first time, impact assessments within the Commission are also linked to the issue of the implications for small and medium-sized enterprises of the regulation concerned. That did not happen before the Barroso Commission. It is only now that we have made the "Think small first" principle part of the legislative process. As far as impact assessments are concerned, we will, however, take a further step and have their quality assessed by independent experts and, where necessary, draw on external know-how. What is important in determining whether or not the Commission is working is not the number of proposals for regulations but rather the quality of the proposals and how well they meet the needs of our society. That, and only that, should be the yardstick.

We will also undertake a drastic reduction in the costs of bureaucracy. My experts have told me that we can in the first few years save tens of billions in this way, particularly if we can work in concert with the Member States. Instead of having to fill in unnecessary forms, our enterprises should be investing more, conducting research and training their staff so that they are not left behind by today's rapid pace of structural change. This is why the burden of bureaucracy should be reduced, a process which should not be limited only to the European level. I believe that a joint target of cutting bureaucracy by 25% is not only possible but also essential if we are to achieve a comparable reduction in the cost of red tape for European enterprises.

Better regulation also involves the rapid implementation by all parties of jointly agreed regulations. Here too, problems are being experienced in the correct implementation in the Member States and in how legislation is applied. Given the large number of proceedings for breaches of treaty provisions, I can see no alternative approach than for the swift and uncomplicated transposition of Community law into the national legislation of the Member States to enjoy political priority everywhere, and for the Commission and the Member States to agree on better means than hitherto for the resolution of problems encountered during transposition. We have already seen some good examples of this - especially in terms of enhanced administrative co-operation between Member States. Once again, however, my prediction is that modern, transparent and simple rules will be the most effective contribution to the correct application of legislation in the EU.

As you know, I have made better regulation my personal badge, and the Commission is fully aware of its responsibility, as the sole initiator of legislation, for bringing about better regulation. This is not enough, however. The Member States and the European Parliament must also pull together. Only if all three institutions stand shoulder to shoulder will we be able to achieve a modern community of law. I am therefore very grateful that the German Presidency has so clearly stated that it regards better regulation as a priority issue.