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Thursday, 9 December 2010

EU Regulation Costs £110 Billion to European Business£110 Billion: What EU Regulation Costs European Business

The European Commission (EC) has admitted that regulation and red tape created artificially by the European Union costs businesses in excess of £110 billion, or €130 billion, every year.
The shocking admission was made in an article in the EU-related news service, Euractive, dealing with the failure of the EC to live up to its own deadlines for cutting waste and red tape.
According to the article, the EC claimed that it was on track to cut red tape by a quarter by 2012. However, the Euractive article added, “businesses shouldn't get their hopes too high up [sic].”
According to Euractive, the EC has admitted that “unnecessary regulation” has created a burden, especially for small to medium enterprises (SME).
The EC realised as long ago as 2007 that it had created a bureaucratic monster, and that year appointed yet another taxpayer-funded body to make suggestions on how to cut down on the waste which they themselves had created.
The High Level Group of Independent Stakeholders on Administrative Burdens (HLG) was duly created, and then actually proceeded to make suggestions as to where “unnecessary” regulations could be cut.
However, as Euractive pointed out, “only a few of the Commission’s major proposals have been fully approved.
“The other initiatives to simplify rules and reduce paperwork are still being debated by EU member states and the European Parliament.”
The article then quoted Andrea Renda, senior research fellow at the Centre for European Policy Studies, who was a consultant to the Commission on the project, as saying that “while the Commission contends it could ultimately cut red tape by 31 percent, "I wouldn’t say we’ve gotten anywhere close so far.”
According to Euractive, other problems involved in cutting red tape include flaws in the method used to measure the paperwork burden and the fact that the target was based on the Commission’s proposals, not on the sometimes weaker versions that are passed by Parliament and EU member states.
Even worse, the goal of a 25 percent saving was based on a 2005/2006 level of bureaucracy, and many additional EU laws have been passed since then, which will have considerably added to the burden.
Increasingly, SMEs have complained that their time is being taken up just adhering to EU legislation.
The Euractive article then quoted Mary Boughton, co-director of a herbal veterinary medicines business in Dorset. That company now spends 20 percent of their time on administrative tasks.
“It’s certainly increased more since we joined the EU,” Ms Boughton was quoted as saying.
“It’s increased a lot in the last five years, especially the employment issue, which is a big issue and very time consuming.”
“We know all of our employees, and we have to jump through the same hoops as if we were British Airways.”
Although one of the original reasons for the creation of the EU and its predecessors was supposedly to simplify trade, Ms Boughton revealed that she now has “more problems exporting within Europe than outside because EU rules are interpreted differently by member states.”
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