Ministers from seven countries signed a joint appeal urging the European Union (EU) to significantly reduce bureaucracy and regulatory barriers in the Single Market to strengthen Europe’s competitiveness and economic growth, the Ministry of Economics (ME) reported to the LETA agency.
The appeal was signed by the ministers of Latvia, Lithuania, Estonia, Sweden, Austria, Poland, and Finland.
The ministry notes that Europe needs a more ambitious approach to deregulation. The complexity of current regulations, legal fragmentation, and varying application of rules in member states create significant costs for businesses and hinder the full functioning of the Single Market.
The Single Market of the EU, established over more than 30 years, has ensured the free movement of goods, services, capital, and people; however, its operation is still limited by regulatory complexity and administrative burdens. This particularly affects small and medium-sized enterprises (SMEs) and reduces Europe’s competitiveness on a global scale, the Ministry of Economics (ME) emphasizes.
The ministry also points out that Europe is lagging behind most other global economies in terms of growth rates. In particular, the gap between EU member states and the United States in terms of GDP per capita is growing, reaching 82% in 2021. According to the International Monetary Fund, if the EU achieved the level of the US in terms of trade openness for services, productivity could increase by more than 8%.
The ME also indicates that from the proposals currently being discussed in various forms and accompanied by impact assessments, an annual recurring burden of 71–86 billion euros and about 65 billion euros in one-time costs is expected.
The ministry emphasizes that the EU needs not only to streamline the regulatory mechanism but also to reduce its volume. Existing rules should be repealed, not just simplified. The current density of regulation in the Single Market has created overlapping systems, inconsistent implementation in member states, and significant compliance costs. Small and medium-sized enterprises may spend up to 10% of their resources on regulatory compliance, sometimes even hiring separate staff to prepare reports.
The appeal suggests implementing the principle of "regulate once — use multiple times." Data should be collected only once and then used by various institutions and member states. Regulation should provide for regular reviews to ensure its relevance to the goal, and outdated rules should be gradually repealed.
Secondly, more sensible rules and more effective oversight are needed. Effective regulation requires ongoing assessment throughout the legislative cycle, including qualitative impact assessments and public consultations that allow for the evaluation of the burden on businesses. Regulatory proposals should also be assessed from the perspective of SMEs and competitiveness to foster innovation and growth.
Thirdly, deregulation is necessary. Reducing regulation helps lower compliance costs for businesses and facilitates the entry of new companies into the market, which in turn stimulates innovation and economic growth. A lower administrative burden gives businesses more freedom to develop new products, set prices, and expand into new markets.
