13 December 2024 — News
A key and immediate priority of the second Von der Leyen Commission is to act on the simplification and administrative burden reduction agendas. For example, the ‘omnibus package’ is expected already for 26 February 2025.
It is indeed essential to identify effective measures and eliminate unnecessary requirements to help businesses and SMEs thrive whilst supporting the EU’s strategic objectives. At the same time, the ambitious policy objectives, including EU’s climate objectives that aim to preserve our planet and environment for future generations, should not be compromised.
The Commission and its civil servants, European Parliament and the Council together fulfil a crucial and legitimate role in enacting legislation that provides for citizens, businesses and the environment. But the EU’s law-making process can be understandably complex and multi-layered, which can sometimes lead to suboptimal legislative outcomes.
Accountancy Europe is therefore pleased to share below recommendations for policymakers to ensure that the expected reforms on simplification and administrative burden reduction are genuine and impactful for businesses.
Simplification and reducing administrative burdens should not be limited to political or quantitative targets, such as a 25% reduction in burdens — especially when the measurement and definition of such targets remain unclear. We encourage the European Commission and co-legislators to clearly articulate their primary objectives for simplification.
Reducing administrative burdens on companies goes beyond cutting red tape and streamlining requirements. It will be equally important to address inconsistencies in how EU rules are transposed and interpreted. Public authorities and enforcement bodies should also have adequate resources, training, and technology to monitor and support the application of legislation. Moreover, clear and simple legislation should be predictable and consistent. And whilst certain well-intentioned measures such as guidance and guidelines aim to support companies in interpreting rules, an over-reliance and over-production of these may likewise lead to further uncertainty and complexity, especially when made available very close to compliance deadlines.
For the burden reduction proposals specifically, the Commission should prioritise legislative integrity and consider withdrawing proposals if excessive complexity or significant deviations from the original intent of simplification are introduced in the legislative process. This ensures that initiatives aimed at reducing administrative burdens achieve their objectives. Practical, real-world needs and impact assessed solutions should take precedence over short-term political considerations that may lead to unnecessary complexity often requiring additional future revisions.
Simplification should be a dynamic and continuous objective. The Commission should consider predictable mechanisms in legislation to regularly evaluate effectiveness and reduce administrative burden, allowing for swift adjustments (for example through level 2 mandates) based on real-world implementation challenges. We recognise that the use of level 2 instruments (delegated and implementing acts) can also generate additional complexity and uncertainty. Whilst they are essential elements in the EU’s legislative toolbox, their use should be carefully designed and calibrated.
But at the same time, simplification initiatives should also prioritise consistency, stability, and predictability for stakeholders and companies. This requires avoiding unnecessary or unexpected regulatory changes stemming from changing political priorities that disrupt companies’ ongoing compliance efforts or introduce new uncertainties. Companies and other stakeholders invest significant resources to prepare for compliance, and changing the rules suddenly and without proper time to assess actual needs does not foster administrative burden reduction. This is also the case for those Member States that have already invested significantly to transpose legislation, and creates uncertainties for those that are in the process of doing so.
Having embedded mechanisms in legislation for dynamic reviews, as outlined in the above section, can help to balance consistency and predictability, whilst enabling for adjustments if deemed necessary. Past experiences show that simplification efforts often fail when they inadvertently increase uncertainty and complexity.
Simplification is about meeting policy objectives in a smarter way. The Commission should retain core policy objectives while eliminating duplicative, inconsistent, ineffective or overly demanding provisions. There should be no rolling back on ambition, including for the Green Deal which is vital for humanity and the planet’s long-term survival.
SMEs carry a disproportionate administrative burden. The Commission should prioritise measures that address SMEs’ unique challenges while fostering their innovation and growth. The measures should go beyond mere legislative simplification, and also provide capacity building and meaningful support to help SMEs adapt to a sustainable and digital economy.
Overall, simplification reforms should reflect the principle of proportionality, ensuring that requirements are scaled to the size, risk, and impact of businesses and their activities. Legislation often categorises businesses – and their legislative obligations – based solely on their financial thresholds, neglecting their actual impact. Accountancy Europe published a thought-leadership paper in 2020 to further develop this idea.
Policymakers at European and national levels should ensure legal certainty by consolidating and harmonising rules, minimising national variations and “gold-plating.” More uniform supervision and enforcement across Member States are likewise essential for a level playing field and ultimately reduce burdens on businesses.
Strong coordination across Commission departments and DGs is essential to deliver coherent, integrated, and efficient simplification proposals. Whilst individual legislation benefits from specific expertise and focus, a larger scale exercise to reduce administrative burdens requires a cross-cutting, holistic approach.
Stakeholder consultations should be meaningful and not a tick-the-box exercise. The Commission and co-legislators should engage with diverse stakeholders, including businesses, civil society, and regulators, to identify practical challenges and co-create solutions. This process should set reasonable deadlines for stakeholders’ input and consider feedback holistically. We also encourage the Commission to adopt a collaborative, solutions-oriented approach, and systematically hold joint discussions between different groups of stakeholders on how to simplify whilst safeguarding policy objectives and ensuring predictability for companies.
Policy makers should systematically integrate digital tools, digital reporting, one-stop-shop compliance portals and data-driven approaches across EU legislation to simplify compliance, reduce paperwork, and improve access to regulatory information. Digitalisation should go beyond rhetoric, with clear objectives, timelines, defined roles, and adequate resources to support the transformation. Public administrations and enforcement authorities must also be properly equipped and resourced to make digitalised compliance a reality.
