How the EU works on simpler rules to support the productive fabric

Today, Europe is an island of stability and prosperity in an increasingly turbulent world. However, economic growth has slowed down in recent years. There is a significant productivity gap between the European Union (EU) and the United States and China, which has widened in recent decades. The loss of competitiveness affects our ability to assert our interests and to protect and improve our living standards. We know what we have to do. First, we must continue to deepen the single market, ending the fragmentation of services, capital and labour markets. We need to streamline fragmented and excessive regulation, to facilitate the creation of businesses in Europe and their expansion. Second, faced with an aggressive neighbour like Russia, the EU must join forces to build a genuine single market in defence, for example by promoting the development of key technologies. Finally, Europe has a bureaucracy problem that the European Commission is working to solve.

I have been in charge of leading and coordinating the Commission's work on this ambitious simplification programme. In recent years, there has been a lot of regulatory activity to achieve objectives such as the dual green and digital transition. Now, in taking stock, we see that this accumulation of increasingly complex rules has become impractical and therefore requires extensive simplification. We need to remedy the fact that EU companies spend too much time and energy on conforming to an increasingly complex bureaucracy instead of focusing their efforts on innovation and productivity. This is particularly true for small and medium-sized enterprises, which find it harder to comply with the most burdensome bureaucratic obligations.

The Commission is determined to make EU rules simpler, faster and less intricate. We have a clear roadmap and we are already moving ahead at a good pace and with a clear objective. In just a few months we have presented simplification proposals in the areas of agriculture, defence, due diligence and sustainability reporting, and most recently on the labelling of chemicals, cosmetics and fertilisers. We will continue this effort with further measures later this year. Simplification entails a redefinition of the existing rules based on feedback from implementation experience. To this end, the Commission has started to listen more closely to stakeholders and businesses. This listening exercise is helping us to understand which elements are working well in practice and which are not delivering the expected results. It also allows us to identify practical changes that bring concrete benefits to businesses and citizens.

Take farmers, for example. With our recent proposals we want to achieve only one farm inspection per year, compared to the current system with a series of onerous inspections. In parallel, we will make it easier for young people to start a career in agriculture. We have also taken measures to protect SMEs that suddenly find themselves subject to the same compliance obligations as large companies during the expansion phase. Our proposal on small and mid-capitalisation companies will gradually change this situation, making the rules more proportionate to the size of the company. Similarly, we have proposed streamlining due diligence obligations so that companies can concentrate their scarce resources on risky areas. In this way, they can achieve better results at lower costs and protect human rights and the environment more effectively. We have also proposed simpler rules for authorisations, procurement and licences for defence and security. Thanks to this simplification, we will be able to achieve NATO's goals more efficiently, foster the development of a truly European defence industry and quickly equip ourselves with an effective deterrent against Russia's aggressiveness.

Thinking on a European scale, the cumulative impact of even very small changes can bring impressive benefits. According to a conservative estimate, the annual savings from the simplification proposals already tabled in 2025 are well in excess of EUR 8.5 billion. And this is only the beginning. The Commission will stress-test the entire body of EU legislation to ensure that it becomes more sustainable, effective and coherent. In other words, better suited to achieve our ambitious economic, social and environmental goals.