Cutting red tape in the EU requires sharp(er) scissors

The incoming European Union's College of Commissioners has a number of difficult tasks ahead of them, one of which is effectively and tangibly cutting red tape. European policymakers need to ensure that the focus is not only on reducing the administrative burden for European businesses but also on amplifying and implementing Better regulation principles in full force.

Trump's DOGE department

Social media was abuzz this week with news of U.S. President-elect Donald Trump appointing Elon Musk and Vivek Ramaswamy to lead the Department of Government Efficiency (DOGE). Their goal is to cut "wasteful government expenditure" and "slash excess regulations," among other objectives.

Time will show if this initiative aids in improving regulation, leaner government, and overall administrative efficiency or will simply be used to restructure federal modus operandi to better support Donald Trump's vision and enhance his power.

Easy way is not the European way

The European Commission appears to have listened to European businesses and public administrations, pledging to reduce administrative burdens, enhance interinstitutional cooperation, and ensure better regulation.

However, no promises have been made regarding staff reductions - quite the opposite. Various political statements show that the EU will require a significant influx of new staff to manage the implementation of already adopted regulations.

Henna Virkkunen (pictured below) - Finnish VP candidate for the Tech Sovereignty, Security and Democracy portfolio - made modest and realistic statements about reducing the administrative burden in her EP hearings. No big promises before collecting the data and seeing where the administrative burden can be reduced.

Ursula von der Leyen laid out clear plans in her political guidelines to appoint a VP for Implementation, Simplification, and Interinstitutional Relations, while each Commissioner will have to present their annual reports to the European Parliament and the Council.

It's important that these plans don't turn into another exercise in red-tape-cut-washing.

Seizing the momentum: avoid 'red-tape-cut-washing' at all costs

Better regulation. Many Better Regulation principles already exist, but they must be applied with greater strength, transparency, and stakeholder involvement. The general public must feel the difference to believe it.

Level playing field. New regulations should improve conditions for everyone - not make it equally difficult for everybody. Proposals for a “level playing field” must be carefully considered.

The future of European champions at stake. European startups and small businesses are pragmatic. They comply and are absolutely happy with size-based exemptions until they scale. If they scale and the regulatory burden becomes too heavy, they will always consider moving their HQs to jurisdictions where their business model is less affected. Working on Single Market and harmonization of rules will help, but the EU has to plan for success of European businesses, long term.

Burden for national administrations. Overregulation (excuse the simplistic term) affects not only businesses (large and small) but also public administrations. I have worked in a relatively lean bureaucracy myself and know the modus operandi of such administrations - they have limited human resource capacity, and the administrative apparatus can only expand so much before it becomes a target for populists advocating simple solutions to complex problems

Global race for growth. Promises to cut red tape mean nothing if they are not followed by principe - step back, evaluate, consider the consequences, and give space for both businesses and public administrations to breathe. More is not always more. The EU is already far ahead of everyone in terms of consumer protection and regulatory guardrails. The race isn’t about new regulations - the race should be about achieving global impact, economic development, and winning the hearts and minds of the brightest talent.