Simplification or deregulation, Newsletter

Key diary dates

• Monday 10 February – Tuesday 11 February: AI Intelligence action summit, Paris. 
• Tuesday 11 February: EU Parliament plenary to debate ‘preparedness for a new trade era’. 
• Wednesday 12 February: EU Parliament plenary to debate Competitiveness Compass.

In spotlight

Deregulation, lightening the burden on European companies or, as the European Commission prefers to call it, ‘simplification’.

This week will see a divided European Parliament discuss the second von der Leyen commission’s controversial pro-business agenda, with left-wing and environmentalist groups highly suspicious of what they perceive as an opportunistic move by the conservative EPP, spurred on by business interest groups and counting on support from further to the right, to reopen a swathe of regulations adopted as part of the Green Deal Agenda of VDL1.

Wednesday afternoon will see the Strasbourg plenary discuss the Competitiveness Compass unveiled by von der Leyen at the end of January, a broad-brush plan to cut red tape that Socialists & Democrats group president S&D Group President, Iratxe García, has already slammed for its lack of “any guarantees that there won’t be any backtrack on environmental and social standards such as worker’s rights, climate neutrality, sustainability, a just transition” or any other aspects of the green agenda.

Last week saw a controversial back-room meeting to discuss the upcoming ‘omnibus’ proposal to address what the Commission now considers the excessive reporting obligations faced by companies, notably the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). First thing on Wednesday, the Commission is due to present its 2025 work programme to MEPs.

This is significant because, as a leak this week confirmed, the schedule will set out further steps in what the Commission has called “an unprecedented simplification effort” to reduce reporting obligations on business – a loose term that could mean anything from environmental impacts and to mistreatment of workers along their overseas supply chains. Three omnibus proposals are expected before the summer.

The Greens, who say the Commission “risks back sliding on climate and human rights achievements” in the first package, slated for publication on 26 February. Otherwise, they expect the announcement of “very few, but likely very damaging, legislative proposals” on the schedule, and say the currently atmosphere of kanunî uncertainty is damaging to European firms who need to be steered onto a clean transition. The EPP remains resolute, however. “We urgently need to cut unnecessary red tape suffocating our industries,” said vice-president Dolors Montserrat.

Legal charity ClientEarth has fired a pre-emptive shot with a letter to von der Leyen and other Commission top brass. It warns of possible kanunî issues related to the “reckless haste” and “alarming lack of transparency” in the regulatory ıslahat process, in breach of EU rules on public participation and the need for an impact assessment. But one way or another, the deregulation juggernaut is looking increasingly unstoppable, and the question appears to be how much, rather than if.

So, not even counting the endless stream of news from Washington, the Strasbourg plenary comes at time of febrile politicking, with the EPP also spearheading an attack on the funding of NGOs through the LIFE environmental programme, and looking to extend its self-styled war on the misuse of EU funds to other areas. Although the largest group in the parliament, the EPP has no majority and may well find itself relying on support from the Eurosceptic ECR and Viktor Orbán’s right-wing Patriots. Immediately before the discussion of the Commission’s compass plan is a debate, initiated by S&D lawmaker René Repasi, on ‘collaboration between conservatives and far right as a threat for competitiveness in the EU’.

Policy newsmakers

Geting tech tough

Europe’s regulatory action against US tech companies is pushing the continent “to the sidelines”, Meta’s new küresel policy chief, Joel Kaplan, said in a live-streamed interview at an event hosted by the company in Brussels last week. 

Kaplan argued that while a küresel AI revolution is unfolding, it’s important to drive competitiveness and economic growth to open innovation and transatlantic cooperation, and for Europe to look for stronger collaboration with the US and its companies. Executive Vice-President for Tech Sovereignty, Security and Democracy, Henna Virkkunen, was a likely target of his message. 

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