Denmark is calling on the EU to better assess the impact of new legislation on businesses and government bodies, in a move designed to complement the bloc’s ongoing efforts to slash red tape.

In a government document, seen by Euractiv, Copenhagen estimates that the EU legislative proposals currently under discussion by member states could cost companies and public administrations up to €85.9 billion and €38.3 billion, respectively, each year.

The paper, which will be discussed by EU finance ministers in Copenhagen this Friday and Saturday, adds that new EU laws could also have a “one-off” financial impact of up to €69.9 billion on businesses and €1.8 billion on governments.

The figures, which are based on the European Commission’s own impact assessments of its proposed regulations and directives, come on top of the administrative costs faced by businesses as a result of existing EU laws, which Eurostat estimates at around €150 billion each year.

Copenhagen is a strong supporter of Brussels’ own push to “simplify” legislation through its series of “Omnibus” proposals, designed to cut regulations in a range of areas, including corporate due diligence and sustainability reporting. The move is part of a broader EU effort to reinvigorate the bloc’s faltering economy and prevent firms from relocating to the US or China.

“We must cut red tape and remove burdens,” Prime Minister Mette Frederiksen said in a speech marking the start of Denmark’s Council presidency in July, adding that European firms “should have the best opportunities to succeed in the global market”.

The latest paper acknowledges that the benefits of EU legislation, such as improved well-being or security, are sometimes hard to quantify. However, it argues there is too little focus in European capitals on the financial impact of new EU laws.

“To complement these important efforts to simplify and reduce the costs of the stock of legislation, European legislators must also take a forward-looking approach and monitor the flow of new legislation,” the document notes.

Only 70% of EU laws currently being negotiated by member states include impact assessments, the document notes, adding that even “where available, the estimates are often partial, do not cover all relevant aspects, and costs may be underestimated”.

“This entails a risk that new EU legislation has unforeseen impacts or excessive costs for companies and public authorities,” the paper notes.

(vc)