News
BackReducing administrative burden on businesses, simplifying legislation and promoting ”Better Regulation” are among the top priorities of the EU Commission. Trade unions and civil society organisations fear a deregulation agenda at the expense of workers and the environment. A joint open letter to the EU Commission President calls on her not to question legislation that aims to protect people, nature and democracy.
Already in her Political Guidelines for the European Commission 2024-2029, Ursula von der Leyen announced the simplification of EU legislation as a measure to strengthen the EU’s competitiveness. Priority will be given to simplifications for businesses. Business and industry associations have been working towards this for quite some time with massive lobbying. Against this background, some 260 civil society organisations and trade unions are calling on the EU Commission President not to jeopardise legislation that aims to protect people, nature and democracy. AK EUROPA supports the joint open letter.
Deregulation is not the answer
Legislation should aim to maximise benefits for the many and not primarily minimise costs for businesses. The focus should be on the question: What would be the costs for society in the event of inaction? This applies to the green and digital transformation as well as to many other challenges that the EU is facing. Short-term costs (for companies) should be assessed in relation to this.
The challenges that the EU is currently facing are not due to excessive regulation, but mainly due to the failure of governments and businesses to plan, invest and adapt to necessary changes in a forward-looking manner. An example: The crisis in the German automotive industry cannot be explained by too many regulations, but by a lack of innovation and a delayed switch to electric vehicles.
The aim of improving competitiveness by simplifying legislation is a matter of concern. There is a risk that this agenda will lead to the dismantling of social, environmental and human rights safeguards, which are considered burdensome by economic operators. Business associations, for example, have described the Wage Transparency Directive as an administrative burden. This directive serves to enforce equal pay for women and men for equal work (combating the gender pay gap) – an important achievement for workers from the last EU legislative period.
The omnibus package
The mission letters (“to-do lists”) to the 26 Commissioners include the task of reducing corporate reporting requirements by at least 25% overall (35% for SMEs, which account for more than 99% of EU companies). EU member states support the project, as stated in the Budapest Declaration of 8 November 2024. As a step towards achieving the desired reduction, Ursula von der Leyen has announced a so-called omnibus package. The aim of the package is to simplify existing and future reporting obligations in the field of sustainability and thus to thin them out. Specifically, the President of the EU Commission mentioned sustainability reporting (CSRD), the EU Supply Chain Act (CSDDD) and the Taxonomy Regulation. These legal acts were adopted during the last EU legislative period and are essential elements of the Green Deal. Now the EU Commission is apparently on the verge of significantly weakening these regulations by reducing reporting obligations. This is a fatal signal. The rule of law and credibility of the EU will be severely damaged if new legislation is encroached upon. In addition, this leads to planning uncertainty for companies. It also penalises those member states and companies that are leading the way in implementing EU law, while rewarding those who are hesitant. Trade unions and civil society organisations oppose the planned omnibus package and call on the European Commission to uphold the rules.
Lobbying of business associations
At the beginning of the new EU legislative period, the unequal balance of power in lobbying in Brussels should be pointed out once again: For every 100 business representations, there are about two workers representations. During the 2019-2024 EU legislative period, EU Commission President Ursula von der Leyen met almost exclusively with business representatives. In terms of lobby transparency, there is a success to be reported – since the beginning of the year, not only the approximately 400 top officials have to register their lobby meetings in the Commission Transparency Register, but also all officials down to the head of unit level – but the overall situation remains unchanged. All the more so, trade unions must firmly oppose when voices from industry demand a dilution of legislation such as the EU Supply Chain Act. In a joint statement, the European trade union federations appeal to the EU Commission and the EU Member States to put lawmaking at the service of the general interest and not to undermine the EU supply chain law.
Outlook
On 28 November 2024, a discussion round took place in Brussels in presence of the President of the Austrian Federal Chamber of Labour Renate Anderl and high-profile representatives from the EU institutions and social partners on the topic of ”Creating good working and living conditions”’. Renate Anderl stressed: ”Especially now that the EU's competitiveness is at the heart of politics, we need to move social Europe forward. After all, a society in which people can no longer live on their wages and which is increasingly divided is not a competitive society.”
Simplification of legislation and ”Better Regulation” are the focus at the beginning of the EU legislative period and are expected to shape the coming years. Valdis Dombrovskis, Commissioner for Economy and Productivity, Implementation and Simplification, is tasked with stress-testing the entire EU acquis with the aim of "removing overlaps and inconsistencies while maintaining high standards". In addition, there are other planned initiatives by the Commission that will have to be critically analysed with regard to their impact on the many.
Further information
AK EUROPA: Joint open letter to Ursula von der Leyen. Protect People, Nature and Democracy
AK EUROPA: Better regulation. At the expense of workers and the environment?
AK EUROPA: EU Better regulation. Creating a level playing field for businesses at the expense of social and environmental policies
Social Europe: Better regulation? Capital first, society second