Czech Prime Minister Andrej Babis speaks of "need to change Europe"

by Martin Banks 

More than 150 representatives of industry, business and the third-sector gathered in Prague on Thursday (31 October) at the Financial Times Business Regulation Forum in Prague.

The purpose of the conference was to gather regulators, policy makers, academics and senior industry leaders in Prague to discuss the role, principles and impact of “better regulation”.

They reflected upon experiences across the EU and beyond, reviewed international best practices and debated the importance of “better regulation” for the business community, with an eye on creating policies to drive innovation for the future.

Speakers included the Czech Prime Minister Andrej Babis, Economic Affairs and Minister of Industry and Trade Minister Karel Havlicek and Vera Jourova, the European Commissioner for Justice, Consumers, and Gender Equality. Perspectives were also offered by the European Commission’s Regulatory Scrutiny Board Chair Veronica Gaffey, World Taxpayers’ Association Chairman John O’Connell and Japan Tobacco International Vice-President Alexander Kryvosheyev.

The remarks offered by Babis – long considered to be tough critic of the European Union’s regulatory burden – provided the most provocative moments of the day.

Welcoming incoming European Commission President Ursula von der Leyen’s pledge to cut regulation as “nice to hear”, Babis was quick to express his views about the “need to change Europe”, exasperatedly mentioning the €10 billion spent each year on sustaining the operations of the European institutions.

In his remarks, Babis stressed the need for government and business to cooperate in a “mutually beneficial” manner on the issue of shaping Europe’s future regulatory framework. The next Commission, he said, should “be a partner” for national capitals in cutting regulation and not a driver of a new regulations.

Supporting the vision outlined by Babis, Economic Affairs, Industry and Trade Minister Karel Havlicek drew upon Pink Floyd’s iconic album, ‘The Wall’, to make his point. Governments should, Havlicek argued, that “the wall” between government and regulators and the private sector should be broken down and replaced with a spirit of “win-win” cooperation.

“As a government”, he said, “we need to know [that business] will pay their taxes and invest their dividends in our country... but businesses also need to know we are listening and not increasing taxes or regulations.”

Havlicek’s comments were music to the ears of the conference’s private sector participants.

Alexander Kryvosheyev from Japan Tobacco International appeared to welcome the concept of balanced regulation and the degree of predictability and certainty it can bring to business. “Where we know the rules”, he said, “we can compete”.

Calling for increased transparency in the way in which government and business can cooperate, Kryvosheyev said: “Government, business and society all have a shared interest in getting regulation right. But they all need to have a seat at a table and a fair chance to contribute to the shaping of that regulation. There needs to be a clear set of rules for all participants in these discussions – government, industry and third-parties”.

His view appeared to be echoed by Paul Kelly from the trade group Food Drink Ireland who, when asked to express how he wished to see government-industry cooperation work, called upon government to “engage effectively with stakeholders across the spectrum” in order to ensure high-quality regulation.

Aside from the perspectives of industry, the Commission’s Regulatory Scrutiny Board Chair Veronica Gaffey expressed a degree of frustration about the effectiveness of the body’s current mechanisms for regulatory consultations.

“It is frustrating”, Gaffey said, “that the Commission can to the effort of devising a consultation and translating it into 27 languages only for it to then receive only 20 responses across the whole of Europe”. Instead, she said, it would be more effective for the Commission to conduct more targeted consultations with industries directly impacted by the nuances of certain regulations in order to ensure a holistic perspective is taken into account when driving regulation.

“The best way”, to improve regulatory proposals Gaffey admitted, “is to sit people down – both and NGOs and industry - to discuss issues and hear views”. Her remarks will likely be welcomed by a private sector that is increasingly seeking to play an active role in shaping the regulations impacting their business.

As the new European Commission prepares to take office, it is clear that the relationship between business and political stakeholders – the private sector rule-takers and the public sector rule-givers – is increasingly coming under the microscope.