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Less is more - Employers' Group against over-implementation

Over-zealous transposition of EU law at national level undermines the Single Market, increases costs and hampers development. Numerous Member State governments use the transposition process as an opportunity to address domestic political issues which results in "gold-plating". This adverse trend has a negative impact on business and should be avoided as far as possible. Good regulation, a consistent and stable legal framework, at both national and European level, is what business counts on - these are some of the conclusions of the conference "Transposition of European law – the key challenge to business activity", that took place on 6 December 2016 in Zagreb, Croatia.

As noted by Dragutin Ranogajec, President of the Croatian Chamber of Trades and Crafts,"overregulation disturbs the development of entrepreneurship, especially of trade and craft businesses and SMEs, which account for 98% of the Croatian economy.  In order to produce and place our products on national and international markets, we need a business environment which will enable us to create, innovate and successfully compete on the national and global market. Above all, this requires legal security and predictability”.

“In the next year, the big project by the Croatian Government and the Ministry for the Economy, Entrepreneurship and Craft Businesses will be activities related to lowering administrative and legal impediments, that is, non-tax burdens which are imposed by the administrative and regulatory environment", said Ms Martina Dalić, Vice-President of the Croatian Government and Minister for the Economy, Entrepreneurship and Craft Businesses.  

Domagoj Ivan Milošević, President of the European Affairs Committee in the Croatian Parliament, underlined the importance of better communication between the private and public sectors in Croatia. In his view, the more entrepreneurs explained their needs to the general public, the easier it would be to meet them.

Simplification of legislation and reducing the burden of tax policies was extremely important for every single craftsman and tradesman – underlined Darinko Kosor, President of the Committee on the Economy in the Croatian Parliament. In his view only by lessening tax and bureaucratic burdens, Member States could the brain drain be slowed (outflow of engineers, doctors, people working in creative industries, etc.).

Employers consistently argued that a stable, predicable and simple regulatory framework was a condition for growth, said Stephane Buffetaut, Vice-President of the Employers' Group. He pointed out that gold-plating led to over-regulation, created differences in regulations between Member States and thus distorted harmonisation and harmed the Single Market.

The participants in the first panel provided a general overview of better regulation, REFIT and transposition practices. "The single market is the heart of the matter, business is the engine to ensure it", said Joost van Iersel, President of the EESC's ECO Section (dealing with Economic and Monetary Union and Economic and Social Cohesion). In his view, business must support the European Commission in its endeavours to make the single market work. It was often Brussels that was blamed when something went wrong in the EU, but for the most part, it was the fault of national decision makers.

Mirella Rašić elaborated on the initiatives undertaken by the European Commission in the area of better regulation. She admitted that, even though the Commission was doing its best to improve the quality of legislation and reduce its volume, the final decision was often in the hands of Member States. Only if all Member States applied better regulation principles would business be able to benefit fully from it. She presented a number of concrete initiatives, taken at all stages (from planning to initiatives, application and evaluation), to improve regulation.  In her view, we would see the results of implementing recent regulation at national level in 2017.

Ronny Lannoo, President of the EESC's Subcommittee on REFIT, briefly outlined the work of the subcommittee and pointed out that, at the beginning of the discussion on REFIT in the EESC, there was resistance from trade unions who had seen it as hidden deregulation

The information report by Ivan Voleš, the EESC Employers' Group Expert on Transposition practices, underlined the fact that the Single Market needed to apply the same rules and that differing transposition contributed to its further fragmentation. He described a number of trends observed in transposition, i.e. transposition going beyond the minimum requirements, incorrect transposition and non-minimal transposition. He also emphasised that gold-plating had a severe impact on cohesion policy. In order to improve the quality of transposition, there was a need for regular monitoring of transposition practices in the Member States, covering not only conflicting transposition, but also  gold-plating. He said that a platform should be set up to prevent unnecessary and burdensome transposition. He also recommended carrying out a survey on transposition, a study of impact assessments and evaluations to discourage gold-plating. In his view, business had a greater role to play and should exert pressure on policy makers to prevent inappropriate transposition.

The participants in the second panel presented concrete examples of faulty transposition and the unnecessarily burdensome EU rules on the competitiveness of the European economy. Regulations concerning public procurement, real estate, the construction sector and working hours were mentioned. The panellists admitted that a lack of understanding of EU legislation and its impact on national law was often a challenge. National administrations did not always know how to interpret the EU's requirements. That was why training for civil servants dealing with transposition would be extremely useful.

The conference was organised jointly by the EESC Employers' Group and the Croatian Chamber of Trades and Crafts as host, with the assistance of the Croatian Employers' Association and the Croatian Chamber of Economy.