What's Happening?
The European Union's regulatory framework, including the Digital Services Act, Digital Markets Act, and Artificial Intelligence Act, has created a regulatory overload that threatens competitiveness, particularly
for small and medium-sized enterprises (SMEs). The EU's ambitious governance model aims to protect citizens, ensure climate neutrality, and promote fair competition, but overlapping regulations have resulted in redundant audits and rising administrative costs. In response, the European Commission has presented an Omnibus Simplification Package to streamline sustainability and due-diligence requirements, reducing reporting burdens by 25% without lowering transparency standards.
Why It's Important?
The EU's regulatory overload highlights the tension between maintaining regulatory ambition and avoiding administrative saturation. The complexity of the regulatory model poses challenges for businesses, particularly SMEs, as they navigate compliance and competitiveness. The shift towards strategic compliance as a governance tool reflects the evolving role of compliance in driving efficiency, transparency, and innovation. The outcome of the EU's efforts to streamline regulations will impact the competitiveness of European industries and their ability to adapt to global market demands.
What's Next?
The European Commission's Omnibus Simplification Package will undergo scrutiny and debate within the EU, as stakeholders assess its impact on regulatory burdens and competitiveness. The proposal may require approval from member states, which could lead to further modifications. The decision will shape the future of EU regulations and their role in driving innovation and competitiveness.
