The author

Rainer Kirchdörfer is a member of the board of directors of the Foundation for Family Businesses and Politics.

(Photo: IMAGO/Monasse Th/Andia.fr, Marco Urban)

A few years ago, former Bavarian Prime Minister and EU adviser Edmund Stoiber identified a new way of thinking about cutting red tape. Many things should change, for example by introducing a new bureaucratic control at the European level.

Meanwhile, disappointment has set in. From the point of view of family businesses, regulatory requirements continue to increase and are difficult to manage. Also of parliaments Call for a moratorium on stress Turn up the volume.

The focus is on the EU because it establishes a large part of the national legislation. Brussels wanted to do much better. Existing laws need to be regularly reviewed and upcoming projects need to align with the new standards.

In the spring of 2021, the EU Commission presented its program for better regulation. This includes a good idea with the so-called “one in, one out” principle.

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To relieve businesses, an existing burden in the same policy area must be removed for each additional burden of new regulation. The EU decided that, but the implementation is still missing.

Only one rule has been suppressed for every four new legal acts

The introduction of this modern measure of legislation began in 2021 with a trial year. The EU Commission reports that useful insights on how to work with the “one in, one out” principle have been gained in relation to ten legislative projects. In the same year, the number of new legal acts in comparison with the number of abolished legal acts was already two to one.

Since 2022, things have been taken seriously: “One in, one out” applies, with some exceptions, as a guideline for all relevant legislative initiatives of the EU Commission. At least, that is the theory.

Legislative practice speaks a different language. A look at the number of laws in Brussels shows this: over the past year (2022), the EU database shows more than 2000 adopted legal acts. This is opposed to removing 534. A blatant mismatch. “One in, one out” is therefore “four in, one out.”

It could be said about this comparison that the new regulation and the load are not necessarily congruent. But many times one thing leads to another.

Family businesses groan at the growing amount of documentation from Brussels

The inconsistent application of the legislative principle also particularly affects family businesses. Many companies report a massive increase in documentation costs due to the Brussels specifications.

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And this is likely to increase dramatically in the future. An example of this is the Sustainability Reporting Guide (CSRD), which is nearing completion.

Family businesses support the sustainable transformation of the economy and are in full swing. But the EU goes into too much detail here and prescribes 2,000 reporting points on how companies should become more sustainable. If this bureaucratic colossus becomes a reality, many family businesses will face documentation and information obligations that they will find difficult to manage.

New due diligence requirements for businesses are emerging everywhere.

The EU Commission relies on the new bureaucracy in other areas as well. The planned supply chain directive is likely to lead to new charges, as are upcoming specifications for batteries.

New due diligence requirements for businesses are emerging everywhere. In 2023, for example, a European ecodesign regulation is about to be approved that will gradually force companies to provide their products with a digital product passport. The list could go on endlessly.

The Commission must now put its money where its mouth is

However, companies wait in vain for the promised relief. So, if you draw a first conclusion, it seems that the EU Commission itself is frustrating its still young principle of cutting red tape.

By 2023, it must be applied consistently if the “one in, one out” principle is not to degenerate into a European castle-in-the-air after a short time. Family businesses continue to pin their hopes on this approach to break the waves of bureaucracy in Brussels.

After all, for them it’s all about “bottom line” when there are always new loads. Excessive bureaucracy not only creates costs, but also prevents companies from concentrating on their real business. Capacities are needed for innovation and the development of new environmental technologies instead of dealing with an ever-new bureaucracy.

Which gives at least some hope: “One in, one out” is mentioned in the EU Commission’s work program for 2023. The EU Commission is called upon to finally put their words into action. Generations of politicians have been working on this: Edmund Stoiber sends his regards.

The author:
Rainer Kirchdörfer is a member of the board of directors of the Foundation for Family Businesses and Politics.

More: “Incredible effort”: many companies are ill-prepared for the law of the supply chain

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