Another EU Rip-Off Exposed

Tuesday October 17, 2006 01:49

by Bertie D. Wolf

EU Commissioner admits EU regulation costs businesses €600 billion a year; warns that powerful EU civil servants have blocked attempts to reduce regulation

The EU's Enterprise Commissioner Gunther Verheugen said in an interview with the FT this week that EU legislation now costs European business €600 billon (£405 billion) a year, on the basis of a new evaluation of the administrative costs of red tape.

This figure is almost twice the previous estimate of €320bn, and represents 5.5% of total EU GDP. This is the equivalent of the EU losing the entire output of a medium-sized country like Holland every year.

Oh Bertie - What big Eyes you have...

This is a further indication that the benefits of the Single Market are being outweighed by the costs of the extra regulation intended to create it. The Commission's own estimate of the benefit of the Single Market is that between 1986 and 2002 it increased EU GDP by €165 billion. So potentially the costs of the extra EU regulation are now more than thee times the benefits.

Back in 2004 Peter Mandelson told the CBI conference that the cost of regulation amounted to about 4% of Europe's GDP, or around double the benefit from the Single Market.

Since the instalment of the new Commission team brought in under Jose Barroso in November 2004, there has been a lot of hype about 'better regulation' and a more business-friendly atmosphere.

But in reality, the cost of regulation has continued to increase. In his interview Verhuegen admitted that there was "considerable resistance" from Commission officials to any attempt to deregulate. He said, "There is a view that the more regulations you have, the more rules you have, the more Europe you have. I don't share that view." He said, "We must combat the perception among citizens that Brussels is a bureaucratic monster, [but] not everyone in the Commission has the same commitment to this objective. We have a problem of democracy, and not only within the Commission, but also in the member states: the administration has more and more powers."
In a separate interview Verhuegen told the German daily Sueddeutsche Zeitung that "the whole development in the last ten years has brought the civil servants such power that in the meantime the most important political task of the 25 commissioners is controlling this apparatus. There is a permanent power struggle between commissioners and high ranking bureaucrats."

He said things were so bad that "The commissioners have to take extreme care that important questions are decided in their weekly meeting, and not decided by the civil servants among themselves. Unfortunately it sometimes happens in the communication with member states or parliament that civil servants put their own personal perspective across as the view of the commission". He concluded that "too much is decided by civil servants".

Verheugen also admitted that even a promise he had made to "simplify" 54 laws this year will not be achieved, saying, "By the end of the year we might have 30". But even this may well be optimistic: according to a letter this week in the FT by Dutch Minister of Finance Gerrit Zalm and Danish Minister for Economic and Business Affairs Bendt Bendtsen, "The Commission's plan was to simplify 54 laws this year, but only five have been tackled. That is alarming." (9 October)

See even more at
http://www.kc3.co.uk/~dt/eu_fraud.htm