‘Better Regulation’ means designing EU policies and laws so that they achieve their objectives at minimum cost. Better Regulation is not about regulating or deregulating. It is a way of working to ensure that political decisions are prepared in an open, transparent manner, informed by the best available evidence and backed by the comprehensive involvement of stakeholders.
Better Regulation places a special responsibility on policymakers to regulate more efficiently. It is particularly aimed at improving the quality of legal proposals, reducing unnecessary and/or overlapping rules, and generally making proposals for laws more understandable. The EU is committed to doing this in an open way, making its decision-making processes more accessible and involving a broad range of stakeholders in policy development. In a 2006 European Commission document on Better Regulation (PDF), the former President of the European Commission José Manuel Barroso says that the EU has ‘to ensure that European laws and regulation are well targeted, correctly implemented at the right level, and proportionate to need’. In particular, the Commission’s strategy of Better Regulation aims to remove institutions of labour market regulation and to minimise legal intervention in the relationships between employers and individual employees. This includes removing not only regulations derived from state intervention, but also those resulting from the activities of trade unions, notably collective bargaining.
Advocates of Better Regulation point to various features of labour market regulation in Europe, including strong unions, high employment protection and what they term generous welfare provisions as an explanation for the high unemployment levels compared with the lower levels prevailing in the relatively deregulated labour markets of the USA. However, the ILO’s 1995 World Employment Report refers, for instance, to a deterioration in labour market performance in all OECD countries since the first oil shock of 1974 ‘irrespective of differences in labour market regulation’ and points to ‘rising inequality and falling wages in the less regulated United States labour market and high unemployment in the more regulated European setting’.