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Brussels, 22 nd of October 2009

Cutting red tape: Commission delivers on its promise and goes beyond

Based on a Commission proposal from 2007 the European Union set itself an ambitious target of cutting administrative costs imposed by EU legislation by 25% by 2012. Today the Commission publishes an overview of progress to date and sectoral reduction plans for 13 priority areas. In total, the measures proposed by the Commission and under preparation would enable businesses to save around € 40.4 bn from € 123.8 bn on red-tape stemming from 72 EU texts and the measures that transpose and implement them in the Member States. Reduction measures put in place by the Commission or proposed by the Commission and already adopted could bring a reduction of EUR 7.6 billion. Measures proposed by the Commission and pending adoption by the European Parliament and the Council would add EUR 30.7 billion to that amount. Preparatory work on further reduction could lead to the presentation of additional measures bringing further reduction of at least EUR 2.1 billion. Now it is in the hands of the co legislators to ensure that businesses can feel the difference on the ground.

European Commission President José Manuel Barroso said: "The Commission is fully on track to deliver on its goals to reduce red tape for businesses.   B usinesses are already set to save €7.6 billion a year. That will become about €40 billion if Member States and the European Parliament back our proposals in full. But better regulation is a job that never ends. It is not just about changing bad rules, but making good rules work better, using new technologies and new innovation. Further streamlining European and national regulation - without compromising on protecting the public - will be a key to the next Commission's drive to promote sustainable economic recovery."

Vice-President Günter Verheugen, Commissioner for Enterprise and Industry, said: “Today’s package is the result of policy commitment and hard work to abolish unnecessary bureaucracy. The Commission has done everything in its power to achieve the 25% target by 2012. I invite the European Parliament and Member States to adopt all of our remaining proposals to make them fully effective for the European economy as soon as possible. It does not cost anything but would mean a boost of around 30.7 bn € for our enterprises, and especially for Small- and Medium-Sized Enterprises (SMEs)."

The EU administrative burden reduction programme will deliver an overall reduction of 40.4 bn € (33% of the estimated burden). It would come into effect, if all Commission proposals find the agreement of the Council and the Parliament. This is particularly the case for two major proposals, made at the beginning of this year, one in the field of VAT aimed at facilitating e-invoicing (worth € 18 bn), the other in the field of company law, exempting micro-entities from accounting obligations (worth € 7 bn).

The baseline measurement exercise has been completed and confirmed the choice made by the Commission to concentrate on the selected priority areas. This measurement exercise has also confirmed the vulnerability of SMEs to administrative burdens. Stakeholders' involvement and the High Level Group, chaired by E. Stoiber were instrumental in evaluating the feasibility and in the identifying further reductions measures, which may be part of new initiatives for reducing administrative burdens during the next Commission.

Moreover, all Member States have now set ambitious national targets, as agreed in 2007.

The Commission will continue to ensure through its impact assessment system that requirements introduced by new policies are kept to the minimum.

The "Action Programme for Reducing Administrative Burdens in the EU" is an essential part of the Commission's overall Better Regulation Agenda. The aim of this policy is to promote competitiveness, growth and jobs. Reducing regulatory costs imposed on enterprises is also in keeping with the Small Business Act and its "think small first" principle and is one of the key areas for action in the European Economic Recovery Plan.

Today's announcement confirms that the reduction of administrative burden is a continuous exercise in view of achieving a real impact in every sector on the ground.

Background: Examples can be found in MEMO/09/474

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