Why von der Leyen’s deregulation drive has Brussels confused

Good morning. Scoops to start: UK Prime Minister Sir Keir Starmer will join an informal EU leaders’ summit in February focused on European security, officials told the Financial Times; while European Central Bank president Christine Lagarde said in an interview that Europe’s leaders needed to co-operate, not compete with US president-elect Donald Trump on tariffs.

Today, our climate correspondent tries to work out where Ursula von der Leyen’s “omnibus” regulation is going. And our Dublin correspondent reports on an Irish election race that is going down to the wire.

All aboard

European Commission president Ursula von der Leyen has shown a predilection for a certain kind of transport in her speeches of late: the omnibus, writes Alice Hancock.

Context: A key plank of von der Leyen’s agenda for her second five-year term is the simplification of rules and cutting reporting requirements for businesses. These are a result, in large part, of the sustainability agenda she put in place during her previous mandate.

The push comes in response to businesses halting investment as they struggle to cope with the paperwork, on top of high energy prices and competition from Chinese rivals.

The problem is that nobody else in the commission seems to know what she’s talking about.

Von der Leyen first revealed her plan for an “omnibus” regulation that would drive a coach and horses through the administrative burden at a press conference in Budapest in October, stating that in “one proposal” you could cut bureaucracy out of many previously agreed laws.

“Measure us at our words, we will come for example with a so-called omnibus,” she told reporters, adding that it would reduce onerous paperwork “in one step”.

Legislation in her sights includes critical parts of the EU’s sustainable finance policy, including new rules requiring companies to take action for environmental and human rights abuses in their supply chains, and the bloc’s landmark taxonomy, designed to guide finance to green investments.

The omnibus rolled by again in a speech to the European parliament yesterday, with von der Leyen telling EU lawmakers that it would be “one of the first steps in the new mandate”.

The mystery is the size, shape and colour of this omnibus. Senior commission officials have expressed surprise at the driver’s repeated omnibus references. One suggested that the idea of new legislation to cut legislation was more style than substance.

“It’s an evolving story, it seems,” another EU official said.

A commission spokesperson said that the commission would “present significant measures to reduce burdens”.

Investors are not happy with the apparent direction of travel, however.

Aleksandra Palinska, executive director of Eurosif, the sustainable finance association, said that cutting reporting requirements before they had “even been properly implemented . . . will neither be helpful to investors, who need the data, nor to those reporting companies that have already started preparing for the compliance”.

Traffic jams ahead.

Chart du jour: Mind the gap

Europe’s banks need M&A deals to keep pace with runaway US rivals, writes Lex.

Final stretch

Ireland’s three main parties head into tomorrow’s general election locked in a virtual dead heat, writes Jude Webber.

Context: The conservative Fine Gael and centrist party Fianna Fáil have led a coalition with the Green party since 2020. Fine Gael’s preferred outcome is to return to anchor a new coalition, with independents or a smaller party.

But Fine Gael has lost steam recently, as three polls saw it falling behind while Sinn Féin, the pro-Irish unity party that is Ireland’s main opposition, gained ground.

A Red C poll for the Business Post published yesterday night predicted Fianna Fáil was ahead with 21 per cent, with Sinn Féin and Fine Gael each on 20 per cent. 

Sinn Féin has no firm allies, and both of the other big parties have repeatedly refused a coalition with the party. But analysts say much will depend on the numbers when the votes are in.

The winner of the election will pilot the country through potential transatlantic trade turbulence. Among the biggest headaches are US president-elect Donald Trump’s threat to slash corporation tax to match Ireland’s 15 per cent, and to slap tariffs on goods manufactured abroad in a bid to lure home companies.

Most of Ireland’s huge budget surplus — expected to be €24bn this year — is driven by US companies based in the country, making it vulnerable to any policy shift. Besides global tech companies, Ireland hosts manufacturing operations for pharmaceutical company Pfizer and chipmaker Intel.

The rising cost of living and lack of affordable housing have also been key election themes, while immigration has been less pivotal than expected.

In a vote marked by high support for independent candidates and a large number of still undecided voters, all eyes will be on tomorrow night’s exit poll.

What to watch today

1. EU industry ministers meet.

2. Czech foreign minister Jan Lipavský hosts Israeli counterpart Gideon Sa’ar in Prague.

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