EU bureaucratic costs to business: up to €600 billion per year

This is more than e.g. the GDP of Australia (€488 billion) or India (€573 billion). The figure does not include the compliance costs of the laws. From Financial Times,

The bureaucratic costs to business of complying with European legislation could be up to €600bn a year – almost twice original estimates – the European Union’s enterprise commissioner admitted on Monday.

Günter Verheugen also acknowledged that his drive to simplify EU laws was falling behind schedule, and again blamed officials inside the bloc’s Brussels-based executive for obstructing his campaign to streamline or scrap legislation.

Some senior European Commission officials had not adapted to “a new political culture” and still believed their job was to unite Europe through more regulations, Mr Verheugen told the Financial Times.

“There is a view that the more regulations you have, the more rules you have, the more Europe you have,” he said. “I don’t share that view.”

He also hit back at his critics in Brussels and in parts of the German press, who have claimed he has achieved little and also questioned the way he has mixed his public and private life.

Mr Verheugen’s onslaught on the Brussels bureaucracy has infuriated many inside the Commission: yesterday the president of the FFPE staff union called for him to apologise or resign.

“If the boss of an enterprise like Coca-Cola blamed a lack of sales on his workers he would either have to apologise immediately or resign,” said Jean-Louis Blanc, president of the FFPE.

The German commissioner dismissed the call for his resignation and returned to his criticism of some officials in Brussels who have failed to shrug off legislative habits acquired “over decades”.

He said new evaluation methodology of the administrative costs of EU legislation – including “gold plating” of laws by some member states – put the annual burden for business at up to €600bn ($756bn, £405bn) compared with the original estimate of €320bn. That figure does not include the compliance costs of the laws.

“That shows the task is even more important,” he said. “I’ve said that in my view it must be possible to get a 25 per cent reduction, and that means a productivity gain of €150bn.”

Angela Merkel, German chancellor, has backed the drive and has vowed to make it a centrepiece of her country’s EU presidency next year.

Mr Verheugen originally hoped to simplify 54 measures this year, but says it will not be achieved, in spite of a stern lecture in July by José Manuel Barroso, Commission president, to officials to speed up the work.

“It didn’t much help,” he said. “By the end of the year we might have 30. I’m impatient because I feel it is a matter of urgency.”

But he insisted that the delay was “not a catastrophe” and that the effort was back on track with growing support among member states and renewed commitment from the Brussels machine. “Eighteen months ago better regulation was a non-issue,” he said.

Mr Verheugen also rejected allegations of favouritism from staff unions and the media over his appointment this year as his head of cabinet of Petra Erler, a long-time aide and friend with whom he spent a holiday in Lithuania this summer.

While the FFPE union yesterday called for “more transparency” in such appointments, Mr Verheugen said he had complied fully with the rules and that Ms Erler – a lecturer in international economy – was well-qualified for the job.

“She was the obvious choice and the best choice,” he said. He added: “You must have the right, as a politician, to decide who you trust in your cabinet.”

Mr Verheugen insisted he was happy in a job which was created – he says – at his own request and denied speculation in Brussels that he was frustrated and looking for a new challenge. “This is exactly the job I wanted,” he said.

However the former EU enlargement commissioner declined to rule out the possibility he might be interested in the post of EU foreign policy chief, when Javier Solana eventually decides to stand down. “The post is not open for application,” he said.


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