Better Regulation Package

Better Regulation is about strengthening the competiveness of enterprises – however, not by giving them a technological edge, but exclusively by cutting costs. In essence, it means that unproductive businesses will be subsidised. Furhermore, the European Commission wants to seize control of the legislative process and neutralise, first of all, the European Parliament.

The aim of the Better Regulation Package is to strengthen REFIT (Regulatory Fitness and Performance Programme) which is its predecessor programme. PACT European Affairs, a consulting firm in Brussels, states that REFIT manifests itself via a number of actions, such as  ‘Assessing effects of all EU legislation on profit margins and competitiveness in the internal market e.g. chemicals and construction sectors.’2
Better Regulation – the struggle against red tape3 – is the new pet of Jean-Claude Juncker, the President of the Commission, and his Vice-President Timmermans.
The goal of Better Regulation is what neoliberals call “streamlining the state”, although civil society perceives this rather as an attack on employment rights4, consumers’ rights and environmental protection. Therefore, one might think that this is just another round of state deregulation. This, however, is not the case; what we are facing is an attack on the heart of what a state should actually represent: regulation of the economy and society for the benefit of the citizens.


In what way does Better Regulation differ from earlier programmes?

1. Great Britain is where the Better Regulation ideology originates from. The British Prime Minister David Cameron made the mainstreaming of Better Regulation a precondition for Britain’s continued EU membership and has Juncker’s and Merkel’s full support.
2. Juncker’s Commission has a profoundly neoliberal orientation, and not just from a content point of view. Its internal structure (organigram) meets the desire of large scale industry. A group of former top officials at the Commission have founded the group ‘Friends of the Commission’, upon taking jobs in industry. In a letter they have called on Juncker to restructure the Commission to create ‘special’ Commissioners with veto rights. The official with the highest-ranking veto right below Juncker is his Vice-President: Frans Timmermans. And this Commissioner has one particular task: implementing Better Regulation. Meaning that Timmermans can block every single bill his colleagues present. Thus, Better Regulation – ergo the prevention of new laws – is embedded in the Commission’s DNA.5

3. New laws may only be introduced when there is scientific proof that they will yield positive results. These ‘Impact Assessments’ have been used in the U.S. for many years and have led to consumer protection being shut out. In the EU, roughly 1,200 additives in cosmetics are banned while in the U.S. this is true for a mere dozen6! The reason for this is that for almost any expert opinion regarding a certain product the industry can buy a counter-opinion.

: Better Regulation does not equal Regulatory Cooperation. The latter implies extensively undermining parliamentarian participation in legislative processes, should TTIP enter into force. Regulatory Cooperation means that big business is granted access to the legislative process in the EU and the EU member states to an unprecedented degree which exceeds all damage already caused by lobbyists, the consultation of stakeholders or the dubious secondment of industry staff to ministries. There are, however, numerous similarities between Better Regulation and Regulatory Cooperation, since the latter makes significant use of Impact Assessments and both want to adjust societies to profit their interests. This similarity goes so far that the U.S. government has made Better Regulation a precondition for concluding TTIP:
“The European Commission’s new ‘Better Regulation Agenda’ partially addresses U.S. demands in trans-Atlantic free trade talks for more transparency and opportunities for stakeholders to influence the crafting of EU rules, but falls short of fulfilling the U.S. desire for the Commission to publish all types of draft legislation prior to formally proposing it.”7
Further information:

The ‘big questions’ on Better Regulation answered by the ETUC8

1. Will EU legislation continue to apply to everyone without exception?
Equality before the law is one of the EU’s legal principles. The question remains whether the European Commission will propose exemption of small enterprises from the EU’s regulations.
2. Will the democratic rights of MEPs and of the Council of Ministers be limited?
Major changes to directives proposed by the Commission can only be made if the European Parliament and Council provide an Impact Assessment beforehand. The European Trade Union Confederation (ETUC) has a corresponding bill to hand. Such a proposal would contradict Juncker’s desire for a more democratic Europe and will be classed as a concentration of authority by the Commission. [As of the most recent negotiations on 9 December 2015, it was possible to ward off the worst attacks by the Commission, but the proposed rules still contain very worrying disadvantages. For example, it remains unclear whether MEPs will be informed of suggestions to change proposed directives put forward by Commissioners and subsequently prevented by Timmermans, as well as the Impact Assessments drafted as a consequence); R.K., 13/01/2016]
3. What will be the final outcome: better regulation or simply more deregulation?
This is not the first time that the Commission has tried to get rid of ‘red tape’ and adapt existing regulation. One result, for example, was that the bill for better protection against work-related cancer was dropped, as were other urgently needed health and safety programmes. In 2013, the development of a directive on the use of carcinogenic chemicals was terminated at the Commission’s command. Since then, 150,000 people in the European Union have died of work-related cancer.
4. In the future, should ‘experts’ be entitled to decide on EU bills, even if they have not been democratically elected?
The ETUC has bills to hand which propose the creation of a ‘Regulatory Scrutiny Board’ (RSB) – an advisory board for monitoring regulation. According to this document, this advisory board would be responsible for giving the Commission the green light to table a bill. However, there is evidence that this obvious transmission of power to the advisory board is missing in the final version of the proposal. [The RSB will definitely be introduced; in fact, according to an internal decree of the Commission it already exists; only the choice of staff remains undecided. The outstanding issue is that the RSB, which is only supposed to assess the quality of Impact Assessments, is supposed to be a purely technical organ. According to Timmermans’ own words, however, it will be a political actor, and rubber-stamp bills whenever Timmermans considers them important, R.K. 13/01/2016]
5. Will this mark the end of excessive bureaucracy or will it continue to spread?
Timmermans’ bill is not limited to the ‘Regulatory Scrutiny Board’. He further advocates that Impact Assessments should be applied across all EU institutions; that there should be more public hearings; as well as a proof of their impact on competitiveness and much more. Further, creation of an ‘Impact Assessment Committee’ is planned.
6. In the future, will government agencies have a say in wage agreements between employers and trade unions?
This would contradict the legislative practice in EU member states. Such an attack would go against the common sense of justice. Employees and trade unions are strictly opposed to the determination of wage agreements by the state.


Update on 13/01/2016

What must be done to counteract the current proposal on the IIA (Interinstitutional Agreement; the agreement that the Commission, the Parliament and the Council are negotiating with each other to determine the way they want to cooperate in the future)? And what must be done regarding the future configuration of Better Regulation?9
This Interinstitutional Agreement is part of the whole Better Regulation Package which consists of five initiatives and overall comprises more than 700 pages. This IIA is the only (!) element of the package which has to be negotiated with the Council and the European Parliament; the Commission simply adopts the other four initiatives. Despite the great improvements achieved during the most recent negotiations on 9 December 2015 – also due to the persistent lobbying efforts on the part of the ‘Better Regulation Watchdog’ group and Dr Christina J Colclough (Head of EU Affairs, UNI Europa, Brussels) – the Better Regulation Package remains a severely problematic issue.10
1. The ‘Think Small First’ Principle states that legislation must always be favourable to SMEs (small and medium-sized enterprises). The original Better Regulation principle even contained the idea that SMEs would be almost completely exempt from any future regulation. This is an absurd idea, as the EU categorises enterprises with up to 250 members of staff as SMEs. Meaning that 99% of all European enterprises are SMEs. Microenterprises have less than 10 employees. Essentially, the Commission is aiming to render this sector exempt from any legal regulation. This would make, for example, MacDonald’s exempt as in franchise companies every store/restaurant is considered a single business. Also the digital market makes this approach outdated, as there are ‘real’ SMEs in this sector which have an annual turnover of several millions. Should they really be exempt from labour legislation? Therefore, this ‘Think Small First’ Principle must be abolished.
2. The member states have to make sure that all bills respect social aspects adequately. This requirement has to become a leading principle in the application of Better Regulation; it has to become the ‘glasses’ through which all bills are seen. All proposals must be screened with regards to their long and short term effects on employment, forms of employment (quality jobs vs. precarious jobs) and the effects on quality of health and safety standards etc.
3. Despite the positive changes achieved in December, the unfortunate term ‘overregulation and regulatory burdens’ remains in use in the IIA’s draft. It is a political term which casts all regulation in the suspicious light of being unnecessary. Previously, regulation was seen as something necessary to prevent market failure. Later, under the influence of the (often underestimated) Stoiber group (2007-2014), regulation had to be made ‘fit for purpose’ and now regulation is considered a mere burden altogether. Especially regarding TTIP negotiations and the introduction of the Investor-State Dispute Settlement (ISDS) as new and effective regulation, it becomes obvious that the Commission is not opposing regulation per se, but is simply strongly biased towards capital.
4. Furthermore, it seems absurd that ‘quantitative targets for regulatory burden reduction’ (Art. 34c) have been defined (this goal was only introduced into negotiations in December). This is a British idea. In Britain, the ‘one-in, one-out’ rule is currently in place. To give an example, this means that when new regulation entails a burden of £1 million for capital, it has to be unburdened with £1 million in another place. The ongoing discussion even proposes a 1:3 ratio in the future.
On 26 November 2015, 19 EU heads of governments wrote a letter to the Vice-President of the Commission in which they called for this measure: ‘You have demonstrated great ambition in the reforms you have already introduced and in your better regulation package of May 2015. But one particular – and essential – reform is still missing: we now need to establish targets for reducing the burden of regulation in particularly burdensome areas, in line with the conclusions of the Competitiveness and European Councils.’
5. It is important to underline the scandalous nature of the term ‘gold-plating’. Timmermans uses this term in a derogatory manner to describe instances when national implementation of European legislation goes beyond the minimum goal set by the regulation in question, ergo when it is ‘more social’ than intended by the Commission.
Let us assume that Slovakia, for example, is implementing a European directive which provides that maternity leave lasts six months, but instead of just six months, it implements maternity leave of nine months. By using the term ‘gold-plating’ in this derogatory fashion, neoliberal Commissioners (such as the social democrat Timmermans; who is said to be ‘100% Dutch and 0% social democrat’) want to apply ‘peer pressure’ to ensure that minimum standards (which the Commission is obliged to introduce) become maximum standards.
6. German state governments must exert pressure on the German Federal Government in order to ask emphatically whether Council negotiations are transparent. Will the state parliaments receive documents from Council negotiations?


[3] Red tape is an idiom that refers to excessive regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents action or decision-making. It is usually applied to governments, corporations, and other large organisations.
[5], p. 8.
[6], p. 22.
[10] In January/February 2016 the Brussels office of the Rosa Luxemburg Foundation has been working on a short cartoon film in cooperation with Christina J. Colclough to illustrate the problematic nature of Better Regulation in a simple manner. 


How democratic is EU law making?
The European Commission (EC) is currently working on the implementation of its Better Regulation Package and praises this initiative for its supposed potential to relief the burdens within the regulatory framework and the resulting economic growth including the promise of more jobs in Europe. After close examination, however, it becomes clear that the Better Regulation Package serves the interest of business first, disregarding social standards, environmental laws and democratic processes.
Sounds a lot like TTIP, the Transatlantic Trade and Investment Partnership, only on EU scale? Yes it does. This initiative brings along the same pitfalls for transparency and ultimately for democracy as the recent initiatives to implement a free trade agreement between the EU and the USA.
Our video explains what the Better Regulation Package is about: how the Commission denies the right to intervene to large groups of stakeholders and how its First Vice President wields considerable power and is therefore undermining democracy in EU law making.