EU simplification will fail without better governance: Three necessary reforms to make sure it doesn’t fail

The EU has long been seen as a global regulatory power, exporting its standards across the world through what’s commonly known as the ‘Brussels Effect.’ However, newer frameworks such as the AI Act and the Markets in Crypto-Assets Regulation (MiCAR) have failed to set international benchmarks – especially in the US, where leaner regulation or even deregulation have been used as a competitive strategy. A key reason lies in the growing complexity of EU rules, increasingly seen as poorly designed, burdensome and difficult to implement. This not only erodes the EU’s global influence but also undermines the competitiveness of its own companies. 

In response, the EU has made regulatory simplification a priority for this institutional cycle. The Omnibus package, reflection processes by financial authorities and renewed dialogue on better law-making all signal a determined effort. Whether these measures will translate into real gains for business competitiveness and EU influence remains an open question. But for simplification to succeed, the EU’s governance needs to improve first. Indeed, there doesn’t appear to be any shared understanding of what simplification actually means. The scope of intervention is equally contested. There’s also no clear coordinator overseeing the various simplification exercises.

This ECRI Policy Brief outlines three key reforms that can help achieve better governance: working towards a universally agreed definition of what regulatory simplification is, with increased competitiveness being one of its key pillars, the development of granular coordination mechanisms and a much wider, admittedly much more ambitious, rethink of EU governance structures overall.