Making EU regulation better for all

The stigma attached to democratic EU regulation by the ‘one in, one out’ approach must be replaced by a positive commitment to a level playing-field and the common good.

The European Union is built on fundamental principles of human rights and democracy. Its treaties set out the objectives of a highly competitive social-market economy, aiming at full employment and social progress, with protection and amelioration of the environment and an assault on social exclusion.

But such progress is not guaranteed: it depends on sound laws and regulations, which must be elaborated in an objective and transparent way and then consistently enforced. That is why the European Trade Union Confederation is actively involved in developing EU legislation and, having recently passing a resolution on better regulation for all, has launched a discussion with the European institutions.

In 2012, the European Commission launched its Regulatory Fitness and Performance (REFIT) programme, followed in 2015 by a Better Regulation Agenda. The official narrative on EU regulation has become increasingly negative—putting the emphasis on its cost, the perceived regulatory ‘burden’ and a purported need for simplification.

Quality regulation cannot be reduced to these elements. It is about investment in the future—a response to the needs of the many, not the few, which must be sustained into the medium and long term.

‘One in, one out’

As president of the new commission, in December 2019 Ursula von der Leyen announced a new approach to EU regulation, conveyed in the commissioners’ mission letters, of ‘one in, one out’. According to this, ‘every legislative proposal creating new burdens should relieve people and businesses of an equivalent existing burden at EU level in the same policy area’. Surprisingly, this had not featured in the political guidelines von der Leyen issued as candidate or in her speech before the European Parliament on the day of her election in July 2019. Since then, the commission was due to publish its communication on Better Regulation, but this has been routinely postponed.

Trade unions are well equipped to put forward the case for quality legislation. Environmental, health and social legislation are essential to protecting people and planet. EU regulation should not be regarded as a burden but as an enduring commitment to the welfare and security of society, with full respect for the precautionary principle.

Any moves to improve law-making should focus on the quality of legislation and how successfully it achieves its aims. This means taking decisions on the basis of sound evidence and comprehensive impact assessments, after full and open consultation with relevant sectors of society. Showing clearly how all these elements feed into final proposals would increase transparency and public trust. Employers and trade unions—the European social partners—have a say on new laws in the social field and this legal right, anchored in the treaties, must be respected and observed.

Better regulation should inform the democratic debate between the European Parliament and the Council. A price tag on legal proposals tabled by the commission endangers this essential debate. Likewise, better regulation cannot lead to a restriction of the treaty rules on social policy or allow the commission to refuse to convey social-partner agreements to the Council of the EU when jointly requested by the signatory parties. This contradicts its 2015 communication encouraging the ‘social partners to broaden and enhance social dialogue by concluding more agreements to be integrated into EU law’ [my italics].

Intelligent and ambitious

Indeed, Europe needs intelligent and ambitious regulation, to tackle the challenges of Covid-19 and the climate and digital transitions, with people at its centre. Sustainability should be a top criterion, going beyond the ‘do no harm’ approach in the European Green Deal. The EU needs to prioritise ways to achieve the commitments in the Paris agreement and the United Nations 2030 Sustainable Development Goals, ensuring that progress is not undermined by harmful incentives or policies in other areas.

Equally important is respect for international human-rights instruments and the EU Charter of Fundamental Rights, including workers’ social and trade union rights. This requires action to protect human dignity at work. This is all the more relevant when new technologies are introduced at the workplace if workers’ data and privacy are to be protected against undue surveillance and misuse of personal details. Fundamental rights are not negotiable, nor can they be reduced to quantitative features. Rather, they are the compass to guide EU law and should prevail over short-term economic considerations.

EU regulation should not be reduced to hypothetical short-term costs, mainly to business. That puts the general public interest at risk—and, with it, the wellbeing of workers, consumers and citizens, territorial cohesion and the environment. EU law-making is not a book-keeping exercise but must take the long view and recognise non-monetisable benefits.

Dramatic crisis

Europe is facing a dramatic health, social and economic crisis. It is crucial to safeguard livelihoods after the pandemic and to achieve a just, twin transition towards a digital transformation that delivers for all and a greener economy making Europe a carbon-neutral continent. It is key that the EU ensures mandatory human-rights due diligence, making businesses accountable for the impacts of their operations on people and the planet. It is more important than ever that the EU guarantees a fair minimum wage, again as an investment in the future, to solve the precariousness and in-work poverty evident today.

A target-oriented approach, such as ‘one in, one out’, would, the former commission concluded in a communication as recent as October 2017, ‘create deregulatory pressures and impair its political responsibility to deliver what needs to be done when it needs to be done’. It represents a damaging turn on the part of the current EU leadership.

The idea was discussed in 2017 but rejected then by the commission first vice-president, Frans Timmermans, as unjustified and inappropriate for the elaboration of EU law. At his hearing before the European Parliament in September 2019, the commissioner now in charge of better regulation, Maroš Šefčovič, expressed ‘a clear “no” to a mechanical approach and to endangering our high standards, especially social and environmental’. 

There is no justification for such a restriction on law-making in the EU treaties. The ‘one in, one out’ approach is especially dangerous in areas such as occupational health and safety, where any delay in regulating exposure to work-related cancer-causing chemicals (carcinogens and mutagens)—such as might be caused by having to lapse another regulation—can literally be the difference between life and death for workers.

Level playing-field

The ETUC is concerned that ‘one in, one out’ will damage respect for the rule of law, since it insidiously encourages mistrust in the benefits of EU legislation. On the contrary, the ETUC encourages the commission to adopt a positive stance, promoting the ability of Europe-wide regulations to offer protection to workers and citizens and a level playing-field for businesses, while delivering legal certainty and predictability for all.

It should also focus on shortcomings in the implementation and enforcement of EU law in member states, while abandoning dismissive talk of ‘gold-plating’. Member states have the legitimate right to improve EU rules, when implementing them, if they deem it necessary, and the minimum social standards set out in European law must not become de facto maximum standards.

Less is not usually more: less regulation does not automatically save money or generate growth. European competitiveness is held back more by the lack of integration in areas such as fiscal, digital, social, environmental and company law, where common standards have the potential to bridge gaps among 27 national systems and create fairness. Unregulated competition—in areas such as taxation, working conditions and social protection—leads to a ‘race to the bottom’, which has a negative impact on workers, businesses and citizens, and on society as a whole.

In short, quality law-making at the European level should be an investment in the future, for people and planet. It must correct the imbalances in the ‘better regulation’ agenda, not double down on them. This is vital to the welfare of citizens and to boost belief in a sustainable and innovative future.