“… Pythagoras is asked to demonstrate what is required of minimal and simple cases.”

The new economic landscape created by recent geopolitical events obliges the entire EU to adjust its policies. However, the speed of adaptation to the new “normal” is a prerequisite for dealing with the existential threat facing the EU industry.

Public debate in recent months has focused on strengthening the structure of the US IRA versus the EU. The latter is looking for new resources for the green transition of the industry, but the real “elephant in the room” is the bureaucracy creating its legislative building. This problem cannot be underestimated. It is no coincidence that the IRA envisages a reduction in bureaucracy in the US, realizing that global competition for industrial investment is based on subsidies, but the simpler operation of enterprises wins.

Recent polls by BusinessEurope (a federation of EU industry associations in which BSE represents Greece) highlight polynomialism and bureaucracy as the top problems for European business after energy. Not unfair. The EU plans to adopt 43 new European policies for 2023 that will have a significant impact on business, in addition to 116 proposals pending from 2022. Greece, with a long tradition of polynomialism, adopted two regulations per month in 2021-2022 that have an impact on business.

We need a different logic that prevents the creation of bureaucracy.

In the current environment, any regulatory burden could seriously hurt growth and, as a result, employment. Thus, the challenge for the EU (and Greece) is the most drastic and rapid reduction of bureaucracy, i.e. reduction of administrative costs or deadlines for compliance with the requirements of enterprises (especially industrial ones). This conclusion is supported by the BSE study in Greece by Business Pulse. However, Greece’s efforts remain unremitting: e-government solutions greatly simplify daily life and continuously improve the business environment. To fight bureaucracy at its root, we need a different logic that prevents it from being created rather than trying to cure it after the fact. The most successful regulatory simplification model in the world over the past fifteen years is based on this logic. Avoiding complex strategies, he adopts the following simple but highly effective rule of suppressing bureaucracy at its inception. Before a law is passed, the relevant ministry announces the administrative costs of compliance that the law adds/subtracts to businesses. Costs are calculated based on a standardized and verifiable methodology. The law is not adopted if the balance of administrative expenses is positive, i.e. increases bureaucracy.

The rule has found application with various variations in countries such as Austria, Germany, Canada, Mexico, USA, Finland, Spain, Denmark, Hungary and Italy. The most significant reduction in administrative costs was achieved in Britain before the Brexit sirens. Even in strict British public administration, the rule is clearly aimed at the result: the administrative costs are 4 billion euros less (in terms of Greek GDP: 280 million euros) than in the early years, subsequently covering the registry of older procedures. Improvements in administrative efficiency have also been recorded in other countries.

The Pythagorean philosophers chose the simplest of many solutions. The easiest way to reduce red tape is to prevent it from being created. Our international experience provides a proven tool for this purpose. A tool that can complement and accelerate Greece’s efforts to upgrade for the benefit of all.

Dr. Giorgos Hirogiannis is the CEO of SEV.