Need for a smarter, business-friendly EU

Posted on 7 Apr 2014 by Callum Bentley

EEF CEO Terry Scuoler stands by the UK's position in the EU, but states EU leaders must switch their focus to the economy and reduce the current swamp of red tape.

Terry Scuoler, Chief Executive of EEF
Terry Scuoler, Chief Executive of EEF

There is a growing likelihood that the new EU parliament will be generously peppered with a euro-sceptic rump of political representatives from UKIP to the Alternative für Deutschland to France’s Front Nationale and PVV in the Netherlands.

Many in Brussels recoil at the prospect but the Commission and the Parliament have only themselves to blame for failing to grasp the growth agenda during the current mandate and reform to support a more competitive and successful European economic model.

Britain’s relationship with the European Union is vital to the long term interests of industry. However Europe has a painful history of failing to tackle economic problems resulting in political meltdown and economic crises.

European leaders now talk about the need for reform and herald a new industrial strategy which has competitiveness at its heart. This is very welcome.

The soon to be elected new Parliament and the newly formed Commission must grasp the opportunity to drag the Eurozone out of the economic doldrums of the last few years.

This must involve taking a fresh look at embracing and delivering a new industrial strategy for Europe that supports all member states and, puts the EU back on the path to sustained growth.

UK manufacturers could not be clearer. Eighty five per cent of EEF’s members want the UK to remain part of the EU, to be at the heart of leading change and at the centre of decision-making in a competitive Europe.

However, they also want to see a reformed EU, one that is more dynamic and focused on economic, as well as social, goals. They also want to see an EU that is fit for a changing world, doing everything possible to reduce red tape and promoting a robust market economy, while securing multi-billion pound trade deals in key markets.

While reform of the EU is critical, manufacturers’ support for Britain’s membership is not conditional on this change. They want to see reform from within, in particular a leaner and more effective Commission in Brussels, one that is reorganised to prioritise economic recovery and sustainable growth.

So what would a reorganised, streamlined and ultimately more effective Commission look like? To begin with we need to see a stronger focus on smart regulation, competitiveness and cooperation within the EU Commission and a reorganisation of the vast Eurocracy that exists behind it. EEF also believes that a re-evaluation of the number of European Commissioners is needed.

EEF has today released its new report, Europe: A Manifesto for Growth, which outlines calls from manufacturers to the European Union to focus on drastically reducing red tape in order to lift the EU out of economic hardship. Download the full report here.

With vast number of departments in the EU Commission we see a proliferation of often unnecessary policy development, usually coupled with conflict between directorates or worse, the development of new initiatives in bunkers. This is compounded by each Commissioner wanting to leave their own mark delivering policies – whether they are needed or not. We need to pose the same question as the former US President Ronald Reagan when he asked his officials, how can we do less?

For a start there is considerable scope for ‘clustering’ of different Directorates-General’ where there is policy overlap. A Board of Commissioners could oversee their work, for example there is an obvious synergy with the Directorates-General responsible for climate action and that responsible for energy.

A move as simple as this would deliver much greater integration of policy, as well as a reduction in costs which would provide far better value for money for European taxpayers. With this structure in mind the Commission should appoint a senior official, preferably a Commissioner, with an office for the oversight of smarter regulation, cooperation and competitiveness. All the Commission’s executive bodies would be required to work with this office to ensure these principles are at the heart of EU Policy Development.

In tandem with this the Commission should examine how to sweep away the tide of regulation which is strangling job creation and stifling investment across the EU.

By appointing a powerful smart regulation office – similar to the UK’s Better Regulation Executive – the EU could institute a proper Red Tape Challenge. The office would have the power to set a rigorous competitiveness test for all new proposals to demonstrate the value they would add. All EU Impact Assessments should be independently scrutinised and those which do not receive a positive opinion should not proceed.

All of this re-organisation must be set in the context of a target to reduce the total EU regulatory burden on businesses with an annual statement setting out the total net cost to business of any new proposals brought forward.

We have to be forceful to shake up the ingrained culture of the EU, which has for too long been a pipeline of over-regulation, much of which adds little or no value to legislation which already exists at national level.

National Governments must wake up to the uncomfortable messages being sent by the march of extreme nationalist parties in Europe and work together with all countries, MEPs and other stakeholders who have a major responsibility to ensure that the European Institutions are clearly focused and work tirelessly to create the right conditions for a dynamic and competitive Europe.

Only by doing this will the EU achieve clear economic benefits for all its members, for businesses and, and offer a positive future working together for the diverse range of people it serves and answering the critics that look set to send a message in the May elections.