Cost of red tape on business reaches $1 trillion

Research published today by Eurochambres, the representative body for Chambers of Commerce across Europe, has revealed that the cumulative cost of red tape on Europe’s businesses over the last 11 years amounts to a staggering €1 trillion. Similarly, estimates of the annual cost of all EU regulations are in excess of 12% of EU GDP.

David Frost, Director General of the British Chambers of Commerce (BCC), has commented that cutting unnecessary burdens and announcing a moratorium on new employment law would be an effective way of providing instant and inexpensive help to struggling British firms.

The report’s authors, Francis Chittenden, Professor at Manchester Business School, and Tim Ambler, Senior Fellow at the London Business School, argue that even though the EU holds the keys to creating a true single market, high levels of poorly designed and burdensome regulation ensure that EU competitiveness is hampered without any certainty that the intended regulatory benefits are achieved.

Commenting on the report, Francis Chittenden said:

"Our research shows that the EU Impact Assessment system is partial and lacking in rigour. Few member states have systems that are complete and open to proper scrutiny. As a consequence, EU Regulations are largely driven by political considerations with inadequate assessment of the impacts on business and the economy."

Tim Ambler from the London Business School added:

“It is a pity the Commission's regulatory approach is out of touch with member states.  Regulation needs to be coordinated."