Denmark warns new EU red tape could cost €124bn a year
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Incoming new EU rules could add up to €124.2bn in additional compliance costs per year for businesses and public administration, according to an estimate by the Danish presidency of the Council of the EU, writes Paola Tamma.
Context: Brussels has launched a deregulation drive to relieve businesses from compliance costs and boost growth. The European Commission estimates that companies already spend up to €150bn per year to comply with existing legislation, and has promised to reduce the burden through a series of so-called “omnibus” laws to simplify the rules.
Denmark, which chairs the EU council of member states for the second half of this year, has made simplification one of the priorities of its presidency.
“There is no question about the fact that we have way too many burdens on our companies,” Stephanie Lose, Denmark’s economy minister, told the Financial Times.
“The commission is showing that they mean it when they say they want to reduce burdens for companies,” said Lose, but added that “it’s not enough to have this close look looking backward. The future flow of regulation is just as important, maybe even more important.”
Denmark added up estimated costs of EU regulations that are currently being negotiated in different policy areas, based on the commission’s own impact assessments. It found that they could add up to €38.3bn for governments and €85.9bn for businesses per year.
This comes in addition to one-off costs of up to €69.9bn for businesses, and €1.8bn for public administrations.
The topic will be discussed at a meeting of EU finance ministers later this week.
However, Denmark’s calculation did not take into account potential benefits of the regulations as those “often difficult to monetise,” according to a note circulated ahead of the ministers’ meeting.
Lose hopes that the exercise will help “move this discussion [on simplification] into the top of mind of people”. She suggested that EU finance ministers take regular stock of incoming EU regulation, asking: “Could we minimise the cost of that?”
“You need to be aware that if you don’t do anything about this, then you will end up in a situation where the European continent is the continent of all the rules and the museums and then the companies have moved elsewhere,” Lose said.