What is the Impact of EU Legislation Simplification?
Departments throughout the European Commission are set to transform the legislation backlog through EU policy.
In what is being referred to as 'omnibus legislation', legislation is being combined in order to boost speed and simplify regulations, under the guide of European Commission President Ursula von der Leyen.
However, whilst this will see an increase in efficiency, it also encourages concerns of long-lasting impact and the increase of risk.
Streamlining processes
The scrapping of regulations and laws is set to take place over the coming months, simplifying processes for businesses.
Rather than having strict regulations which make it burdensome for businesses to run, these new modifications will directly reduce regulations on transport, environment, artificial intelligence, defense, chemicals and financial services.
Instead of having to prove they meet high standards regarding environmental practices, businesses will face significantly less barriers, meaning they will be able to operate faster with more simplified goals.
New proposed laws could be dismissed, whilst others that have been in the legislative process for more than two years will either be withdrawn from consideration or revised to be more simple.
The aim is to reduce the number of European businesses tied up in metaphorical bureaucratic red tape, aiming to boost Europe's economy and compete with businesses in North America and Asia.
“We need to make it easier to do business in Europe, to innovate in Europe, and to embrace the newest technologies,” von der Leyen said at the beginning of her second term.
It is an attempt to give businesses a chance at succeeding within their markets, as well as giving the European economy a lift.
The environmental impact
However, what some see as an increase in efficiency, others see as a decrease in standards.
"We have a sophisticated legal system in the EU. Simply cutting elements out of it with fast pace and without proper consideration of the overall implications will create more harm than good," says René Repasi, a German member of European Parliament.
If the Commission is focussing on speed rather than thoroughness, more mistakes could be made, or less regulations could mean less sustainable business operations.
Regulations which previously instructed that companies had to disclose their environmental, social and governance (ESG) impact are currently under negotiation for being cut.
If this omnibus bill, originally brought out in February, is passed, it would reduce the number of businesses covered by environmental obligations by 80%.
Big companies would no longer need a climate transition plan and it would make it harder to hold them accountable for environment damage which occurs in their supply chain.
There has been a big push in recent years for companies to embed ESG regulations in their supply chains, with many putting large investments towards their net zero goals.
An upcoming bill is also proposing cuts to regulations on pollution and waste, meaning that bigger companies could start having a more detrimental impact on the environment if they have viewed ESG policies as a legal necessity rather than a company desire.
Industry specific changes
As well as environmental policies seeing a major shift, supply chains across sectors will be greatly impacted by this streamlined approach.
Defense
Brussels has proposed a 'defense readiness omnibus' which will improve access to grants and infrastructure projects that would focus on defense and rearmament. There are also plans to simplify military-grade transport.
Farming
The Commission is promising savings of €1.6bn (US$1.88bn) per year, through its reduction in environmental compliance spot checks and paperwork.
Chemicals
One bill is aiming to reduce restrictions on cancer-causing substances in cosmetics, with less detailed health warnings required on packaging.
AI
The Commission is considering reducing reporting obligations regarding cyber, data and AI in order to boost European innovation to compete with China and the US, despite fears regarding tech safety.
Finance
Rules regarding securitisation - the packaging and selling of debt to third parties - are potentially seeing a relaxation, as it will mean banks can lend more out to companies and more money will be moving throughout the EU.
Though some businesses are looking forward to this regulation shift, it calls forward many concerns about safety and environmental policy.
Whilst it will see the faster processing of many new businesses and business regulations, it will also see the cutting of ESG practices and is sowing the seeds of discomfort in some of the more left-leaning business owners.
