Cutting Red Tape at all Costs: Why the EU’s Simplification Agenda is Weakening Europe

This article was originally published in the Frankfurter Allgemeine Zeitung (in German) – EU-Nachhaltigkeitsregeln: Dieser Bürokratieabbau ist für die EU gefährlich | FAZ

On 22 October, one of the European Commission’s key simplification initiatives – the so-called Sustainability Omnibus – failed to reach a majority in the European Parliament.

Despite an agreed compromise, the majority of Christian Democrats, Social Democrats and Liberals collapsed – a political warning sign. At a time when the EU faces particularly great challenges, it is paralysing itself. The debate over the Sustainability Omnibus leaves the impression of a divided EU unable to deliver on its promise to cut red tape. Instead of simplifying rules, the EU is creating new uncertainty, including for the very companies it aims to help.

Simplifying rules under pressure

Cutting red tape is a top priority for Ursula von der Leyen’s Commission – and the member states are pushing this agenda even harder. German Chancellor Friedrich Merz, French President Emmanuel Macron and other European leaders are demanding rapid results. The extent of the pressure was evident at last week’s EU summit, when Parliament President Roberta Metsola had to explain why Parliament failed to pass the Sustainability Omnibus. That the European Council is now demanding such accountability from Parliament raises questions about the EU’s institutional self-understanding.

For years, Brussels has faced criticism for producing too many and too complex rules. With the omnibus proposals – laws that amend several regulations at once – the Commission seeks to correct this: cutting red tape, easing burdens on businesses, and strengthening Europe’s competitiveness, not least compared with the US.

Yet many civil society groups see this as an attempt to weaken protection standards under the guise of simplification, especially in environmental and consumer protection. These concerns are voiced against the backdrop of a broader pushback against sustainability. Additionally, this trend resonates with the composition of the European Parliament, in which parties to the right of the Christian Democrats now hold more than a quarter of the seats.

“Today’s Omnibus has been cancelled”: Poor preparation and polarisation

With the Sustainability Omnibus – and especially the planned simplification of the EU’s Corporate Sustainability Due Diligence Directive – the Commission chose politically sensitive files from the start.

The preparation already had technical shortcomings. Unusually, there was no broad consultation of stakeholders, no impact assessment and no calculation of the specific administrative costs to be saved. The result was hastily drafted, controversial proposals.

Early on, deep divisions emerged in Parliament between Christian Democrats, Social Democrats and Liberals, groups that usually support von der Leyen’s Commission. The Christian Democrats even threatened to pass the proposal together with far-right factions if the Social Democrats refused to back their demands to water down sustainability rules.

Which group ultimately caused the vote to fail remains unclear because it was held by secret ballot. But the mutual recriminations in the aftermath show how little trust remains between the democratic parties.

After the failed vote, Parliament President Roberta Metsola stressed that Parliament would “deliver” even without a centrist majority, a sign of how fragile the coalition backing the von der Leyen Commission has become.

A divided EU opens the door to external pressure

By revealing how divided it is over sustainability and consumer protection standards, the EU makes itself vulnerable to external pressure. Actors from Qatar to the US are trying to exploit this disunity to weaken unwanted regulations.

Since the start of Donald Trump’s second presidency, the US has been lobbying aggressively against EU rules that apply to international companies, threatening new tariffs in response. Meanwhile, Qatar and Washington are leveraging Europe’s energy dependence as a bargaining chip, hinting in a joint letter to EU leaders that gas supplies could be at risk.

Although the EU has had an Anti-Coercion Instrument since 2023 to counter such interference in its legislative process, this tool remains ineffective when internal and external pressure coincide. Officially, the Commission insists that EU rules are not up for negotiation. But the joint statement on this summer’s EU-US trade deal contains a commitment to ensure that sustainability standards do not pose “undue restrictions” on transatlantic trade.

Whatever one’s stance on sustainability, if the EU fails to better protect its legislative process, it invites external actors to exert even more targeted influence in the future. For example, in the upcoming Digital Omnibus, US tech companies and the Trump administration are already mobilising heavily against the EU’s digital rules.

Faster simplification requires better craftsmanship

Last week’s outcome shows that good simplification is difficult, but it is achievable if the EU proceeds more strategically.

It should start with less controversial legislation to achieve quick results. Involving parliamentary groups early on can help build stable majorities – and well-crafted proposals make it more likely that reforms will have real impact.

The European Parliament, too, bears responsibility. It should restore its ability to act from the democratic centre, seek compromise and deliver results. This is vital not only when it comes to the simplification agenda, but for all projects of this legislative term.

However, the deeper problem lies with the member states. Unable to agree on major reforms, they often take refuge in the seemingly easier topic of simplification. As a result, cutting red tape becomes a substitute for genuine integration. But the current situation shows that even simplification is politically complex.

The EU needs more courage, not only to reduce the bureaucratic burden, but to renew itself structurally. This could be achieved through investment in future industries and infrastructure, a deeper single market and a functioning capital markets union. If done well, simplification can be part of this strategy – but it is no substitute for real reform ambition.

About the authors

Claudia-Dominique Geiser is Senior Expert for EU economic policy in the Europe Program at the Bertelsmann Stiftung. Her focus is on EU single market policy.

Etienne Höra is Project Manager at the Europe’s Future program at Bertelsmann Stiftung.