EU must counter excessively meddlesome regulation, says Tánaiste

One of the principal complaints by entrepreneurs about the EU business climate is that it is encumbered by “excessively meddlesome rules”, the Tánaiste and Minister for Enterprise, Mary Harney TD, has told an international business conference in Dublin. “There are compelling economic reasons for getting to grips with regulatory reform and putting in place strategies to make it happen” she said.

The Tánaiste was speaking at the closing session of a two-day conference in Dublin Castle on the European Charter for Small Enterprises. The conference, which was attended by senior officials and business representatives from 34 countries, including all the EU member states, was the final formal event of Ireland’s 6-month EU Presidency.

“Rules will always be necessary to allocate rights and obligations, to create standards and to provide protections whether in the market place or in society generally. But I think it is fair to say that governments and the EU have not always given sufficient thought to the economic cost of bad rule making. The IMF has estimated that improvements in the EU regulatory framework could deliver as much as a 7% increase in GDP and a 3% increase in productivity in the longer term” she said.

The Tánaiste said that over the past 6 months the Irish Presidency of the EU had placed a very high priority on getting the momentum for economic reform back on track. The Competitiveness Council, which she chaired, had sought in particular to reinvigorate the 10-year strategy agreed at the Lisbon Summit in 2000 to make Europe the most competitive knowledge-based economy in the world.

She added “Working in tandem with the next three Presidencies to maintain the momentum for reform and to provide continuity for the initiatives which we have commenced has been a strong feature of our Presidency. In order to give concrete effect to this policy we, in conjunction with the incoming Dutch Presidency, have issued a request to our European colleagues to identify specific areas of legislation that offer significant scope for simplification. In addition, compulsory impact assessments of legislative proposals on economic activity have been introduced to prevent excessive regulatory demands on industry and business in future”.

The new REACH proposal (on the registration and evaluation of chemicals and pharmaceuticals) could be regarded as “a crucial test case on this issue and also as regards our resolve to improve competitiveness in general”, she said.

The Tánaiste said that while its international competitors were outperforming the European economy in some sectors, real and substantive progress had been made in meeting the Lisbon Agenda targets. Six million jobs had been created within the EU since 1999 and long-term unemployment had dropped from 4% in 1999 to 3% in 2002. Key markets, including telecoms, electricity and rail freight, had been fully or partially opened to competition and the “knowledge economy”, as manifested through the use and application of ICTs, had continued to strengthen.

“The European Charter for Small Enterprises is one of the key instruments to achieve the Lisbon objectives. Throughout Europe, SMEs account for more than 95% of all enterprises and are a key source of innovation as well as of employment and wealth creation. The encouragement and support we give them is crucial to our economic performance and our potential for export growth” the Tánaiste said.

ENDS/ETE 1241