Global Economics

Leaders Eye Cutting EU Red Tape 25%


With bureaucracy accounting for half of the bloc's administrative costs, Brussels believes a reduction would free up more GDP for investment

EU leaders have agreed to a somewhat stronger goal on cutting red tape in their national legislation, despite previous reluctance to commit to a reduction of 25 percent of administrative burdens.

In the conclusions of the summit adopted on Friday (9 March), Europe's heads of state and government confirmed that they want to see a cut by one fourth in administrative burden originating from EU legislation by 2012.

Originally, the idea was that countries should cut red tape from their national legislation by the same token but industry ministers rejected the idea days before the summit.

However, on Friday the EU leaders agreed that member states should try to "set their own national targets of comparable ambition" in national legislation by 2008, while taking into account their starting points and national traditions.

German chancellor Angela Merkel praised the decision to boost the national commitments, saying it could be seen as a "joint shared commitment"—shared by member states with the EU executive.

The move comes after last-minute pressure from the European Commission, urging governments to make a clear commitment to cut national bureaucracy which accounts for half of the bloc's administrative costs.

"It is very encouraging also for commissioners," said Ms Merkel.

Brussels believes red tape reduction would boost the EU economy by the equivalent of 3.5 percent of GDP and free up an estimated €150 billion for investment but only if national targets are included.

But member states opposed a concrete reduction figure, claiming that some countries—such as the Netherlands—are far ahead with the objective while others suggest there is no generally accepted mechanism to measure such cuts.

Under the agreed conclusions, the commission and the EU parliament should "make greater use of impact assessments" as part of legislation-making and table the most pressing proposals on better regulation already this year.

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