Martin Sandbu (Free Lunch, FT.com, February 20) is right that regulation is not inherently bad for growth. The problem is not the existence of rules but their overlaps and contradictions, which create unnecessary burdens, disproportionately felt by smaller, emerging companies that lack the compliance resources of larger competitors.
Take the untested and complex interaction between the recent AI Act and the General Data Protection Regulation, the EU’s new rules changing the way companies can store and use personal information — or the fragmented implementation of GDPR itself, ironically a regulation meant to harmonise privacy rules in Europe. In packaging, for example, companies can face diametrically conflicting labelling requirements in different EU countries.
The cost of all this red tape adds up. The EU estimates that businesses spend about €150bn a year just on paperwork and compliance. Such inconsistencies make it harder for companies to scale, discouraging investment and innovation.
After a period of intense regulatory activity, Europe must now prioritise the coherence and proportionality of these rules.
Regulation is essential, but it must be designed to support economic dynamism. A predictable, well-aligned framework would do far more for Europe’s future than maintaining complexity for its own sake.
Vincenzo Renda
Brussels, Belgium