Answer given by Mr Verheugen on behalf of the Commission
Regulation can burden businesses either by imposing heavy compliance costs or by requesting information in relation to the compliance with legislation. The latter are called administrative burdens. This distinction is important because the reduction of administrative burdens does not interfere in any way with the substance underlying the piece of legislation.
These costs have their origin in regional, national, Community and international law. Moreover, costs generated by Community legislation often avoid potentially much larger costs flowing from 25 different pieces of legislation. In addition, some of these costs are related to legal obligations or reporting requirements that are prerequisites for the effective implementation of legislation in areas such as accounting, company law, and consumer, health and environmental protection.
As estimated by the Commission, benefits of cutting administrative burdens by 25 % in the Community as a whole could amount to a gain of 1.5 % of gross domestic product (GDP) or EUR 150 billion(1).
With regard to the benefits of the EU single market, the QUEST econometric model estimated the positive effects in 2002 on GDP of the implementation of the 1992 single market programme (SMP) at EUR 165 billion. These benefits are related to the ex-post impact of the SMP over the period 1992‑2002 and exclude most of the service sector which accounts for 70 % of the European GDP. Moreover, the figure is for EU‑15 only. Actual benefits of the single market should therefore be well above the quoted figure of EUR 165 billion. Finally, this estimate excludes other economic benefits from EU membership which are estimated to be very considerable and, obviously, excludes environmental and other non-economic benefits from legislation.
It is therefore clear that one cannot draw any conclusions from a comparison of the benefits generated by the completion of part of the single market for the EU‑15 with costs for the EU‑25 generated by administrative requirements imposed by legislation originating at a regional, national, Community as well as international level. This said, the Commission is committed to reducing administrative burdens, both at Community and Member States level, and has proposed an ambitious strategy to achieve this(2).
In conclusion the Commission would not agree that the costs of the single market are therefore three or four times greater than any conceivable benefit and that the EU costs more than it is worth.