Von der Leyen Plans to Scrap Stalled Legislation: What’s Next?

Hello, Champions of Net Zero!

In a bold move that reflects her commitment to efficiency, European Commission President Ursula von der Leyen has initiated a critical review of legislative proposals that have stalled in negotiations. This initiative aims to streamline the Commission’s legislative agenda, focusing on proposals that lack sufficient momentum to succeed in becoming law. As part of her ongoing efforts to enhance the effectiveness of the European Union’s executive branch, von der Leyen is asking for a comprehensive list of these ‘languishing’ legislative proposals.

The push for efficiency is a hallmark of von der Leyen’s second term as Commission President. During her upcoming State of the European Union address, she is expected to outline her vision for a more agile administration, advocating for a political process that is less encumbered by outdated regulations that hinder business operations. This drive towards a more streamlined approach is not just about cutting red tape; it’s also about fostering an environment conducive to innovation and growth within the EU.

As part of this efficiency drive, the European Commission is undergoing a substantial restructuring. Notably, at least nine omnibus simplification packages are in the pipeline, aimed at reducing the complexity of existing rules across various sectors, including environmental regulations, agriculture, defence, and energy. These proposed changes are designed to alleviate the burden on companies and national governments alike, making compliance less cumbersome.

A recent document prepared ahead of the State of the Union highlights the Commission’s strategy to eliminate “overly complex EU rules” and shorten the timeframes for updating regulations. It also targets the relaxation of restrictions on cross-border operations and aims to simplify procurement processes for businesses.

However, von der Leyen’s efforts to ‘clean house’ do not imply that all stalled legislative files will face the axe. The Commission President has already intervened to protect certain key proposals, such as the longstanding Equal Treatment Directive, which was initially proposed in 2008. This decision reflects her intent not to signal defeat on critical issues. Nevertheless, proposals that do not align with the Commission’s current political priorities may well find themselves on the chopping block.

As part of this legislative review, several notable files are under scrutiny, and here are some that could potentially be included in the next ‘kill list’.

Legislative Challenges Ahead

Despite their good intentions, numerous proposals are likely to be considered for cancellation, with senior officials having to decide whether to allocate resources to them or abandon them altogether. For instance, the Commission’s 2022 draft legislation aimed at combating child sexual abuse material online has become a contentious issue among EU member states. The proposal has faced significant obstacles, particularly from countries unwilling to compromise on encryption standards, leading to a stalemate that has persisted for some time.

Additionally, the Victims’ Rights Directive, which aims to establish basic rights for victims of crime, has similarly failed to gain traction. This proposal, championed by the Polish presidency, has encountered pushback from legislators concerned about its broader implications, further complicating its path to adoption.

Environmental legislation, particularly relating to climate change, is also in the spotlight. The Energy Taxation Directive, a crucial element of the Commission’s “Fit for 55” clean transition agenda, remains unresolved due to a lack of consensus among member states. This directive aims to rationalise fuel duties but has raised concerns among island nations over potential increases in travel costs, igniting fierce lobbying efforts for exemptions.

Financial Services Under Review

In the realm of financial services, the Commission is determined to salvage key proposals that have been pending for over two years. Among these is the Payment Services Directive, aimed at strengthening Europe’s private payment sector, along with the Financial Access to Data Framework (FiDA). The latter proposal, which seeks to mandate data sharing by banks with customers and third parties, has faced stiff opposition from financial institutions and is considered at risk of being sidelined once again.

Officials within the financial services sector remain optimistic about reaching a compromise on FiDA, despite acknowledging its precarious position. Tensions around this proposal have been ongoing, with industry players expressing concerns over potential impacts on innovation and competition.

The Generalized Scheme of Preferences (GSP), which allows developing countries to export goods to the EU at reduced tariffs, has also been a point of contention. Attempts to use trade preferences as leverage against irregular migration have met resistance from the European Parliament, further complicating negotiations.

Meanwhile, the proposed bloc-wide deposit insurance scheme has remained stagnant for over nine years, primarily due to strong opposition from Germany. In contrast, the digital euro initiative, which aims to create a pan-European payments network, appears to be on more stable ground, bolstered by its status as a political priority for the Commission.

Environmental Regulations in the Crosshairs

Among the legislative proposals currently in limbo is the Green Claims Directive, which seeks to regulate how manufacturers communicate their environmental credentials to consumers. The directive has faced considerable backlash, particularly regarding its technical requirements for small businesses. The Commission’s earlier indication that it might abandon the proposal if exemptions were not granted has created uncertainty about its future.

Critics of the Commission’s deregulation agenda argue that efforts to streamline regulations could undermine vital protections for people and the environment. A coalition of 470 organisations, including prominent groups like Friends of the Earth and Greenpeace, has expressed concern that the proposed cuts could weaken existing safeguards for labour rights, human rights, and environmental protections.

In conclusion, as Ursula von der Leyen prepares to address the EU’s legislative priorities, the balance between efficiency and essential protections will undoubtedly take centre stage. Whether her administration can successfully navigate these complex legislative challenges while maintaining a commitment to safeguarding rights and the environment remains to be seen.

Gabriel Gavin reported from Strasbourg. Ben Munster and Antoaneta Roussi contributed reporting from Brussels.