The businessman’s case for EU regulation

You don’t often read a full-throated defence of business regulation. Less often praise for European regulatory systems. Still less often calls for the EU to go further and faster on creating new rules. So here’s a triple surprise: an article from the FT’s outgoing Brussels correspondent, Stanley Pignal, that does all three. A representative extract:

European-level regulation is overwhelmingly favored by businesses. Their rationale is that even though EU regulations are sometimes cumbersome and onerous, it is inevitably better to have one set of rules applied to the bloc than 27 divergent regulations at national levels. This is true even if the standardized rules are more stringent than some of the local regulations being replaced.

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This requires a certain amount of sovereignty to be ceded by governments—or rather, the agreement by governments that each follows the same rules. Take driving licenses. Few doubt that it is desirable for licenses issued in any EU country to be recognized and accepted in any other member state. That only works if the requirements for issuing driving licenses are at least broadly similar. No EU country wants to have cars on its road driven by people who have not passed a test. But what if the Hungarian government wants to scrap all driving tests? It could, but it would have to leave the union. Conformity with the rules is the price to pay for the benefit of the single market.

National governments have wholeheartedly supported this process of European regulatory integration. Those who think that “unelected Eurocrats” are at the heart of all EU rule-making misunderstand the union’s politics. After all, it was national governments that endowed the European Commission, the EU’s executive arm, with the power to propose new regulations. But governments retain a large say over the crafting of EU laws. The EU Council, which must agree to all legislation, is made up of the 27 national governments, with voting rights allocated roughly in accordance to each country’s population. Depending on the dossier, the Council either has to agree unanimously or by hefty majority, which means in practice that larger member states exercise an effective veto.

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Published by Anthony Zacharzewski

Anthony Zacharzewski was one of the founders of Demsoc in 2006. Before starting work for Demsoc in 2010, he was a Whitehall civil servant and a local government officer.