Better regulation, stronger Europe

The Single Market has been the engine of EU jobs, growth, and prosperity for over 30 years. Continued reduction of barriers and integration are essential for the Single Market to remain competitive and resilient in a more conflictual, volatile and complex world. 

Results from a survey of more than 3,350 export-oriented SMEs in 11 EU countries shows that European SMEs perceive regulatory differences across different Member States as the most critical barrier for them to do more business in the Single Market. These SMEs experience that regulatory barriers erode their competitiveness, leading to lower growth, higher costs and slower digitalisation.

The analysis finds that there continues to be a potential for better regulation to reduce regulatory burdens. 

The research points to two main areas of improvement. 

• Firstly, EU regulations should be designed in a way that makes them simpler to use and easier to comply with. EU regulations that cater for the needs of SMEs will reduce compliance costs, strengthen competitiveness and support innovation. 
• Secondly, EU regulations should be designed in a way that ensures even and timely implementation. Less fragmentation and gold-plating enable SMEs to grow through the Single Market.

The Better Regulation Toolbox has the potential to help develop EU regulations that meet the desired policy objective while being targeted, effective, easy to comply with and with the least burden possible.

Stakeholders point to nine specific initiatives that could strengthen the use of the Better Regulation Toolbox and reduce regulatory barriers for SMEs:

1. Apply the SME Test systematically and consistently early in the impact assessment process
2. Improve the application of the SME Test and the consultation process
3. Ensure clear roles and responsibilities around impact assessments and SME consultations
4. Include implementation risks in impact assessments
5. Ensure that impact assessments are required and conducted for substantial amendments
6. Design and use regulatory sandboxes more actively for SMEs
7. Use the Competitiveness Check as an integrated assessment of impacts on SMEs’ global competitiveness
8. Systematically conduct ex-post assessments of SME impacts to ensure institutional memory and evidence-based policy making
9. Explore opportunities for using AI in the regulatory process

In an era of increasing geopolitical tensions, re-evaluation of global value chains and a global economy heading towards recession, the Single Market is key to securing growth, competitiveness and resilience of the EU economy.

See all the Implement Consulting Group studies commissioned by Amazon