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21st Jan 2022

Barroso backs major anti-red tape scheme

  • Sending electronic invoices for VAT would save up €18 billion a year (Photo: Flickr.com)

EU businesses could save up to €40 billion a year in administrative costs out of their total annual burden of €360 billion, if the EU adopted proposals tabled by a European Commission advisory group.

"If we can relieve businesses to the tune of €40 billion, it's a sort of recovery programme," former Bavarian premier Edmund Stoiber, the head of the high-level group which issued the report on cutting administrative costs, said at a press conference on Friday (18 September).

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Set up in 2006, the group aims to reduce red tape arising from EU legislation by 25 percent by 2012.

Mr Stoiber noted that the total cost of administrative burdens in the European Union is €360 billion a year, out of which around half is related to national regulations and the other half to EU legislation and its transposition into national law.

Among the envisaged measures, replacing paperwork with online VAT invoices would save European companies up to €18 billion. Simpler accounting rules for small companies, of up to 10 employees, would reduce the administrative costs by €7 billion.

Already put forward by the EU commission, the proposals need the endorsement of the European Parliament and member states, with both Mr Stoiber and EU commission president Jose Manuel Barroso urging the two bodies to adopt them as quickly as possible.

Mr Barroso said he would make the reduction of administrative burdens a "high political priority" of his next commission, to be sworn in by the end of the year.

"Indeed, I will make smart regulation a leitmotiv," he said, adding that the better regulation services will be put under his direct authority.

Mr Stoiber's anti-red tape mandate would be expanded by another two years. The centre-right politician said the role of his high level group could be expanded following a "bureaucracy check" of the EU, to be delivered by himself and Mr Barroso in January or February.

As to claims that the measures add up deregulation, industry commissioner Gunther Verheugen, himself a Social-Democrat, said such criticism is unfounded.

"We don't change the substance of the legislation or the protection measures, we've just made it cheaper. You often see in member states rules which are only written in the interest of bureaucracy," Mr Verheugen said.

In a rare moment of candour, the outgoing commissioner also spoke about the influence of interest groups over his own institution.

"Very often you see which law is defending a certain privilege of an interest group - you can trace it in the European Parliament, in the Council [of the European Union] and even here, at the commission," he said.

The EU commission and Mr Verheugen himself have often been criticised by pro-transparency groups on having a favourable stance toward big business lobbies.

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