Better regulation is a competitiveness policy

Europe’s competitiveness is determined not only by energy prices, access to finance, skills or investment, but also by the quality of regulation under which our economy and society operate.

For companies, regulation is not an abstract debate in Brussels. Every reporting requirement or compliance obligation eventually becomes a business process requiring time, people and money. For a large corporation this may be another task for a compliance department. For an SME it may mean that the owner spends another evening dealing with regulation instead of customers, employees or business development.

But better regulation matters to everyone: for businesses, it means predictability, lower unnecessary costs and more capacity to invest and innovate; for citizens and workers, it means clearer rights and protections that work in practice; and for public authorities, it means rules that are easier to implement and enforce. Ultimately, better regulation strengthens trust in public policy achieving its objectives without creating unnecessary complexity. It is not about choosing between competitiveness and protection, it is about delivering both more effectively.

This is particularly relevant now. In April, the European Commission presented its Communication “A Simpler, Clearer and Better Enforced EU Rulebook”, proposing changes to how EU legislation is designed, implemented and enforced. It introduces “simplicity by design”, stronger regulatory scrutiny, a “deep cleaning” of existing EU rules to identify overlaps and inconsistencies, and stronger enforcement across the Single Market. It is an attempt to move from individual simplification initiatives towards a more systematic approach to EU lawmaking.

One thing is crucial: better regulation does not mean deregulation. Europe needs common rules to provide legal certainty, fair competition and protection of consumers, workers and the environment. The question is whether we regulate well, whether rules are evidence-based, proportionate, understandable and coherent.

This matters particularly for SMEs. More than 80% of new EU initiatives are considered relevant to SMEs. Yet the EU’s “Think Small First” principle too often remains a principle rather than regulatory discipline.

We should reverse the logic: instead of designing legislation around organisations with large compliance departments and later asking how SMEs can cope, policymakers should consider the smallest affected businesses from the beginning. 

But this is not the only weakness. The Commission may assess its initial proposal, but legislation can change substantially during negotiations in the European Parliament and Council. Businesses do not comply with the original proposal – they comply with the final law. Substantial amendments should therefore also be assessed. This does not restrict political decision-making; it ensures decisions are informed by evidence.

Business also needs a stronger role in this process. Companies possess something regulators cannot fully reproduce: practical implementation experience. They see where requirements overlap, definitions conflict and individually reasonable rules create disproportionate costs when combined.

Meaningful consultation therefore matters. Shorter consultation periods may make policymaking faster but risk excluding SMEs and smaller organisations without permanent teams monitoring EU legislation.

Digitalisation and AI also offer opportunities. Public authorities possess enormous amounts of regulatory data. Properly analysed, it could identify overlaps, contradictions and cumulative burdens. The objective should not simply be to make bureaucracy digital, but to make regulation easier to understand and comply with.

Finally, Europe needs to measure results. Estimates made when legislation is proposed are not enough. We need to know what final rules actually cost and whether simplification delivers the promised benefits.

Better regulation requires a change in culture. Businesses should not be seen merely as recipients of legislation or lobbyists seeking exceptions. Their practical experience should be part of designing, testing and evaluating regulation.

Europe does not need the lowest possible number of rules. It needs rules that achieve their purpose with the least unnecessary complexity.

Katrīna ZARIŅA, EESC Employers' Group member and Rapporteur of Opinion INT/1129 Communication on a Simpler, Clearer and Better Enforced EU Rulebook.