Text excerpt from the opinion piece published on RTL.lu on 2 October.
For years, we have regularly been reminded of the importance of strong cooperation within Europe. This applies not only to a small country such as Luxembourg, but also to the larger Member States of the European Union, as they too are too small to tackle today’s global challenges in isolation. And those challenges are considerable. Every day, the media report on how Europe has fallen behind on the global stage, whether in artificial intelligence, defence, energy, the automotive industry or many other fields. This is not entirely new, however. Similar concerns were already voiced during the financial crisis and the Covid-19 pandemic.
As Europeans, when we follow the news, we are left not only with the impression, but almost with the certainty, that other major economic regions, such as the United States, China or India, are overtaking us. For a long time, we became accustomed to living in peace, prosperity and democracy. Yet in today’s complex and uncertain geopolitical environment, all three of these achievements and privileges are increasingly under pressure. We have no longer enjoyed peace on our continent for the past four years. Our democratic values are being tested, as reflected in election results across several countries. And our prosperity is being called into question by the weak performance of the European economy.
Europe’s economy is genuinely at risk of falling behind. One of the main reasons lies in the fragmentation of the European market. Cooperation is either insufficient or no longer effective enough, while Brussels has developed a bureaucratic superstructure that too often hinders, slows down and discourages economic actors, instead of guiding, informing and motivating them.
Our businesses should, on the contrary, be supported when they take risks, because they create the wealth from which we all benefit. In the past, Europe produced remarkable success stories such as Airbus. Today, such achievements have become all too rare.
In her State of the Union address on 16 September, Ursula von der Leyen appeared to recognise the seriousness of the situation. She identified the revitalisation of the European economy through a massive reduction in administrative burdens as a key priority.
In a world where competition is becoming increasingly fierce, Europe cannot expect companies to invest more, innovate faster and create new jobs, while at the same time making the backpack of rules and constraints they carry even heavier. Too often, procedures accumulate into an incomprehensible mix that is sometimes contradictory and often counterproductive. As a result, businesses spend more time in their offices dealing with forms, administrative requirements and compliance obligations than out in the field with their customers and teams.
Two recent examples illustrate this perfectly.
The European Regulation on Packaging and Packaging Waste (PPWR) pursues legitimate objectives: reducing waste, improving recyclability, promoting reuse and fostering a better-functioning Single Market. In practice, however, many companies are faced with a framework that is neither pragmatic nor proportionate. Several implementation details remain unclear. Businesses must define their role in complex value chains, collect new data and, when operating across multiple EU countries, navigate additional national requirements. Yet a European regulation designed to harmonise the Single Market should not end up making access to that market more complicated.
The same applies to the Pay Transparency Directive. Greater fairness in remuneration is, of course, a commendable objective. Yet behind this principle lie very concrete obligations: additional information requirements, greater transparency regarding criteria, new internal procedures and, for certain companies, additional reporting obligations. Each measure may seem reasonable when viewed in isolation. However, when they accumulate, the burden quickly becomes excessive. This is precisely where the principle of proportionality should apply.
To this complexity, we must not add the practice of so-called gold-plating, namely the tendency to implement European rules at national level in a stricter or more complex manner than is required. Ursula von der Leyen has therefore proposed a “Pact Against Gold-Plating”. This somewhat recalls the Omnibus Package, a commendable initiative aimed at reducing regulatory burdens. Unfortunately, in doing so, the Commission has also introduced new rules. They may be simpler, but they remain additional rules, nonetheless. That is not genuine simplification, especially for small businesses.
Perhaps it would be beneficial if European Commission officials were required to complete a four-month internship in a company before being entrusted with drafting directives or regulations. Brussels officials should also engage more systematically with stakeholders on the ground in order to better understand the potential negative impact their proposals may have on the healthy functioning of businesses.
Perhaps new regulations are not always necessary to achieve a given objective. Information and guidance can often be sufficient. We could also draw inspiration from successful approaches implemented elsewhere in the world, adopting practical and solution-oriented methods based on best practices, while always keeping in mind the goal of strengthening European competitiveness within a sustainable framework.
What is certain is that time is working against Europe. Europe must now take back control, act decisively and simplify. This is the first essential condition to enabled the Single Market to function more effectively and to ensure that the advantages and expertise that still exist across our continent can be brought together intelligently and contribute to a stronger Europe.