Conference on Regulation & Growth - 24/03/15, Brussels

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On 24 March 2015, the Council of the Notariats of the European Union (CNUE) organised a conference jointly with the Robert Schuman Foundation on “Regulation and Growth”. A way for the European notariat to focus on other sectors, such as public and financial services, that have been the subject of recent legislation and to study the effects. To this end, representatives from the European institutions, civil society and academics were invited to make their contributions during two panel discussions, moderated by Sophie MOSCA, a journalist at the European daily Europolitics.

While proposed reforms of the notarial function are making news in Italy and France, Jean TARRADE, President of the CNUE, recalled in his introductory address that “many sectors have been broadly opened to competition. The results are mixed. Energy, telecommunications, mail distribution, rail transport, etc. This deregulation was not a smooth journey. The disappearance of a large number of jobs initially, then the appearance of new actors, and now the general phenomenon of concentrations (…). In the opposite direction, the need for regulation was felt, particularly in the financial sphere following the subprime crisis”.
So, to regulate or deregulate? Which path should be followed to foster growth and employment in the EU? The reply given by Jean-Dominique GIULIANI, Chair of the Robert Schuman Foundation, was that good legislation needed to evolve at the same pace as economic and legal developments and adapt to the situation on the ground, that of implementation by the national administrations. In this respect, he highlighted the Commission’s wish to take a number of important texts considered dispensable off the legislative agenda. “In the past, the legislative machine got carried away (…). Yet there is nothing worse for the European Union than reproducing red tape at national level”. In a context of globalised competition with the Member States and also the Chinese, Indian, Brazilian and Russian industries, Europe cannot burden itself with over-restrictive regulation.

Another difficulty is that the quest for good regulation must undergo intra-EU negotiations. Berthold BERGER, Director of Competitiveness at the Secretariat General of the Council of the EU gave a precious testimony of these negotiations between Member States, where the legal traditions remain particularly significant and often cannot overcome the result of the lowest common denominator.

Nevertheless, for Jean-François DUBOS, Chair of the Civil Law Initiative, “EU law at 28 easily accommodates different legal systems”. Taking the example of his experience as Chair of Vivendi and the management of the group’s branches in different countries, he added that the same was true for the economic operators.

So how can we assess the need and effectiveness of regulation? The panellists discussed the utility of rankings, such as the renowned Doing Business Report, which makes country-by-country comparisons on a global scale. The Doing Business report is intended as an indicator of the reliability of setting up a business in a country, but without taking into account the legal certainty criterion in its analysis.

Regretting also the “stacking up of regulations”, and wanting to get out of politicians’ current short-term vision, Mr DUBOS proposed to set up more crosscutting mechanisms, such as organisation by the European institutions of a seminar every three to four years to clarify recent case law at European level and the difficulties in implementing legislation.
At the Commission, and in contrast with the current reform proposals in Italy and France, the development of new European legislation is the subject of a clearly identified process: assessment of the acquis, prior consultation, impact assessment, etc. are all essential stages. President Juncker’s new team, in which a ‘better regulation’ portfolio was created and entrusted to Frans Timmermans, reflects a stated willingness by the Commission to legislate less, better and where it is necessary.

Prof. Christian HELMENSTEIN, Chief Economist of the Federation of Austrian Industries, insisted on the need for legal certainty that any new legislation must bring in a context of information asymmetry and negative externalities. He illustrated this with the example of the market of real estate transactions. Many governments within the EU have delegated part of their official authority to notaries to regulate exchanges. His words were supported by Olivier DE MAISON ROUGE, a French lawyer, who recalled that, in France, litigation relating to real estate transactions was at a level of 1/10 000 as opposed to 1/3 in the United States. Pierre BAUBY, a lecturer and researcher at the University of Paris VIII and at Sciences Po Paris, added that other factors had to be taken into account to assess the effectiveness of general interest services: universal access, equal treatment, affordability, etc. He also insisted on the need for legislation that evolved according to the issues.

The example of regulation of the financial markets used by the panellists was, in this respect, very instructive. In 2008/2009, at the height of the crisis, it was necessary to act quickly at European and world level and to attend to the most urgent matters first with appropriate measures. A second phase of structural reconstruction followed, to prevent the risk of a relapse. It is now time to focus on legislation that encourages employment and growth, whilst keeping the objective of stability. This is today’s priority for the Juncker Commission and such are the European citizens’ expectations.