STRASBOURG — European Commission President Ursula von der Leyen’s crusade against red tape has reached her own institution. The question is, how far will it go?
The EU executive’s Secretariat-General — which answers directly to von der Leyen — has asked Commissioners’ teams to produce a list of draft legislation that has become stuck in negotiations with a view to revising or axing proposals that don’t have sufficient support to become law.
It’s part of an efficiency drive that is a defining feature of the Commission president’s second term. During her State of the European Union speech on Wednesday, the head of the EU’s executive arm is expected to call for a more efficient administration, a streamlined political process, and fewer burdensome regulations on businesses.
Many things are already in motion. A planned restructure of Commission departments is underway. At least nine omnibus simplification packages are in the works to reduce the scale of existing rules that need to be navigated by companies and national governments on the environment, agriculture, defense, energy and chemicals.
And a document compiled in advance of the State of the Union lays out a series of steps that the bloc can take to slash “overly complex EU rules,” shorten the time it takes for rules to be updated, relax restrictions on cross-border operations, and make procurement easier for firms to navigate.
Now, von der Leyen is cleaning house.
The review process doesn’t mean that all files that have reached an impasse will face the chop, even if they’re old. Von der Leyen has already intervened to save key proposals such as the Equal Treatment Directive first proposed in 2008, to avoid sending the political signal that she is giving up on passing them. However, other draft laws, especially ones that don’t match the Commission’s political priorities, are unlikely to escape the scrap heap.
Here’s a selection of files that may be on the next kill list.
PR headaches
Despite obviously poor optics, a number of well-intentioned proposals are sure to make it to the review list, leaving top officials to decide whether to reallocate resources away from them or keep them on the slate in a symbolic show of intent.
The Commission’s 2022 draft law to fight child sexual abuse material online, for example, could be destined for the cut, having become a headache for every country holding the rotating EU presidency. Poland was the latest to fail at brokering a deal in the first half of this year. Two entrenched blocs have refused to compromise — some governments won’t accept measures undermining encryption, while others see it as necessary; there seems to be no middle ground.
Likewise, the Victims’ Rights Directive failed to pass despite being championed by the Polish presidency after legislators expressed concerns over the wider implications of the measures. Designed to give those affected by crimes a number of basic rights and expectations, it is seen as unlikely to progress any time soon, a further two officials who worked on the file said.
Climate change could also be in the spotlight. The last part of the Commission’s “Fit for 55” clean transition agenda that remains to be passed, for example, is an update to the Energy Taxation Directive, which remains unworkable without the support of member countries despite a series of compromise proposals. Intended to rationalize the duties paid on fuels, it has led to fears among island nations that it would make flights more expensive, and to fierce lobbying over carveouts for private jets.
Money matters
The Commission’s financial services authority intends to fight to save a number of core files that have dragged on for longer than two years, according to an official with knowledge of the matter. They include the Payment Services Directive, designed to bolster Europe’s private payment sector; and the financial access to data framework (FiDA), which would force banks to share data with customers and other third parties, the official said.
Of the two, FiDA is seen as more at risk. The proposal, which has faced fierce resistance from banks and insurers, only narrowly escaped the axe earlier this year thanks to eleventh-hour rearguard action by financial services czar Maria Luís Albuquerque.
“I would not be surprised if they have a go at it again,” said the official. “It would be damaging for innovation and the data economy, but protecting incumbents may weigh more in the calculation.”
“FiDA at risk? When has FiDA not been at risk?” said a second EU official, pointing to long-standing tensions around the file. But financial services authorities still intend to push for a compromise on the framework, they added.
European institutions have also been bickering since 2022 over a proposed overhaul of the Generalized Scheme of Preferences (GSP), which allows developing countries such as Pakistan or Bangladesh to export goods to the EU at low or no tariffs in order to promote their economic growth and sustainable development. But in a review of the scheme, the Council of the EU wanted to use the trade preferences to turn the screws on irregular migration, again prompting pushback from the Parliament.
Also possibly coming under scrutiny is the Commission’s bid for a bloc-wide deposit insurance scheme, which has been on ice for over nine years thanks to stiff German opposition.
But the digital euro, a deeply controversial effort to build a pan-European payments network, is likely to fare better because it is a political priority of the Commission. The file recently came under the purview of Valdis Dombrovskis, a top commissioner and ally of von der Leyen.
Leaner, meaner … but what about greener?
Among the files currently in limbo is the Green Claims Directive — designed to regulate how manufacturers market their products to consumers worried about environmental impacts.
The proposals were the subject of a major spat earlier this year when the Commission said it intended to kill them off if legislators refused to grant exemptions for small businesses that would otherwise have to deal with reams of technical rules. The executive then recanted, but opposition from member countries like Italy, and a refusal to move forward with the legislation in its current form, puts it squarely in the crosshairs.
And not everyone sees the plans to cut regulations as a good thing. A loose coalition of 470 organizations, including Friends of the Earth, Greenpeace and Oxfam, on Tuesday published an open letter to the Commission alleging that the deregulation push “weakens the rules that safeguard people and the environment.”
“Under President Ursula von der Leyen, the European Commission plans an unprecedented wave of drastic cuts to regulations that protect labour and social rights, human rights, digital rights and the environment,” they claim.
Whether the former German minister can assuage those concerns on Wednesday remains to be seen.
Gabriel Gavin reported from Strasbourg. Ben Munster and Antoaneta Roussi reported from Brussels. Hanne Cokelaere, Helen Collis, James Fernyhough, Camille Gijs, Giovanna Faggionato and Tommaso Lecca contributed reporting.
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