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Tale ved konference om regelforenkling og OECD Regulatory Policy Outlook 2018, den 27. marts 2019

Thank you very much for the invitation to participate in this panel. I am here to tell you about some new developments in the way we deal with regulatory policy in Denmark. I will focus on the implementation of EU regulation and on the large potential of a more structured Nordic cooperation in this field.

For decades, I have worked with EU affairs, both as a member of the European Parliament and as a member and Chairman of the EU-committee in the Danish Parliament.

Once, I met with a representative for a large Danish company who told me that his company was building a new warehouse I Sweden.

Why Sweden, I asked.

He told me that the fire safety regulation was too strict in Denmark, and that the benefits of building in Sweden instead of Denmark far outweighed the costs.

It seemed strange to me that there could be so big a difference between Denmark and Sweden. Two countries that do many things the same way and in many aspects are very similar.

But it became even stranger, when I found out that the fire safety regulation in both our countries stem from the same EU directive.

In Denmark, we had simply implemented the directive in a way that hurt our ability to compete with Sweden, and in Sweden they profited from implementing the directive in a way that suited the companies better while at the same time – of course – living up to the directive’s standards. 

In the Danish EU-Committee, we spent a lot of time dealing with the negotiations of proposals for new EU-regulation.

But it struck me that Parliament was only involved in a very limited way when it came to the implementation of this very same regulation.

I decided to change that, and the fire safety case is a good example why Parliament needs to take more responsibility in this phase too. 

Since the vast majority of new EU-regulation is implemented administratively – that is without Parliament being involved – this was potentially a big problem.

It is well know that directives can be implemented differently from country to country, but these differences can also creative barriers to trade and market access.

And it is a misunderstanding, that there is no room for interpretation in regulations. I have asked the Danish government for an overview of this specific subject, and we have solid evidence that there is such a room for interpretation even in regulations.

Also, it is often not clear whether all elements of a national implementing follow strictly from the EU-legislation or if any elements go further than required. This means that over-implementation – better known as gold-plating - could take place without proper political discussions about it. Especially since 9 out of 10 acts of EU-legislation are passed without the Danish Parliament being involved.

In other words, we risk ending up with complicated new regulation, which is unnecessarily difficult for businesses to understand and comply with, and which Parliament hasn’t had a say in.

I felt strongly that more political attention was needed if we were to implement new EU-regulation in the smartest way.

As mentioned in the country note on Denmark in the “Regulatory Policy Outlook” report, we have established a new Government Committee to monitor the national implementation and transposition of EU-legislation. The ministers of the Committee meet monthly to discuss new legislation and examine cases where there may be a potential for making existing implementation more business friendly.

The Committee does not only get its input from the various government departments. We have also established an independent EU-implementation Council to advise the Committee and to bring specific regulation to its attention. This Council consists of representatives of the main industry organisations, social partners and consumers. In this way, we have established a direct communication channel between the main stakeholders and the responsible ministers.

The opportunity for businesses to make the Government aware of the practical effects of a regulation is important to both parts. This is why we have also introduced a facility called “Report a Rule” on all ministries’ websites.

In this way, any business or citizen can make us aware of a specific regulation that they are concerned about, whether it is too burdensome, outdated or just plain meaningless - be it an EU-regulation or not.

We have also improved the transparency in the legislation process when it comes to implementation of EU-legislation. Going forward, it should always be clear in any new regulation if it contains elements over and above those that are required to comply with the EU-regulation it implements.

Now, you may wonder, does all this make any real difference? Let me give you some examples:

A few years ago, the Danish government conducted a review on the implementation of three EU directives on metrology in Sweden, the Netherlands, Germany and the UK. The review found that Denmark had in fact put more administrative burdens on our businesses than our neighboring countries.  We therefore modernized and streamlined the existing legislation and reduced burdens for stakeholders and businesses for 1.2 million euros.

We call this process a “neighbor check”, and it is now a commonly used tool.

Another more complicated example is from the area of health and safety at work. In this field, two important directives are the Chemical Agents Directive and the Directive on Cancer-related Substances. The Danish implementing laws for these directives have existed for many year and have become very complex and extensive as they have been revised and adjusted over time.

The Implementation Council alerted the Implementation Committee to the legislation, claiming that with several implementing laws, it had become unclear and expensive for businesses to find out which rules they had to comply with. In addition, they wasted investments in production equipment which turned out not to live up to the standards set by the enforcement authorities.

A neighbor check was carried out with Sweden, Norway and Germany. This showed that the concrete Danish rules in fact reduced our companies’ competitiveness. There is currently a follow-up taking place with a view to finding a more structured and logical regulation without lowering the level of protection.

The assumption is, that if the regulation is easier to understand, more companies will comply with the legislation.

I pause here for a second to underline the importance of “less is more” when it comes to legislation. This is not about deregulation or slacking on standards. It is about making legislation easier for everyone, citizens and businesses alike, to comply with.

It is matter of legal certainty for all.

In the fishing regulation, we are currently introducing a sattelit based solution for transferring electronic logs. We do this, because it cuts the industry’s cost of reporting by 49 percent.

Now, back to neighbor checks.

When we compare specific Danish regulation with that in other countries, we very often look at Sweden and other Nordic countries. This is natural, as our systems are fairly easy to compare and our companies often work across the region.

Doing so, we try to level the playing field, so that our businesses are not any worse off because of the way we have chosen to implement a specific EU-directive in Danish legislation.

But neighbor checks could very well also be used to integrate the Nordic markets much better. Every time we introduce new legislation, we risk creating new barriers to the mobility of our businesses and citizens. What we need is the exact opposite.

Working together in a much more structured way on the implementation of new EU-regulation is crucial if we are to fulfil the ambition of our Prime Ministers – to make the Nordic region the most integrated region in the world.

The economic potential in Nordic cooperation on EU issues is significant. It reaches much further than coordinating policy positions in Brussels. And it can take many forms. I want to highlight a specific case of current Nordic cooperation where the business case is particularly impressive.

The initiative is called Nordic Smart Government. It’s vision is to simplify the lives of small and medium-sized enterprises and create new business opportunities for these by improving the quality of financial data and making these available in real time.

Public and private digital systems will be connected in a new system that will handle financial data used by the enterprises for their economic transactions and for their reporting to government authorities – for example tax, statistics and business registries.

For a small business, this could for example mean that they will not have to report almost similar data into different systems to comply with legal requirements. Also, a Danish company could send an e-invoice to a business partner in Sweden, which can then handle the invoice digitally.

They would also have more reliable information about the financial credibility of the partner, they do business with, reducing the risk of loss. And especially small business could benefit from easier access to loans. 

The business case in Nordic Smart Government shows that more digital and real-time financial processes in business-to-business could free up resources within the Nordic small and medium sized enterprises equivalent to approximately 200 billion Danish kroners annually once the vision is fully realised. That’s around 27 billion Euros.

This requires that there are standardized digital systems available and that all business make use of the digital possibilities.

Nordic Smart Government is an example of an initiative that takes advantage of the Nordic region already being highly digitalized. The collaboration amongst the Nordic countries qualifies and develops our national initiatives and increases the quality in deliverables, in a more cost-effective manner.

There are national teams in each country working to supplement and adapt the Nordic activities to specific national needs. In Denmark, we have an initiative as part of our eGovernment Strategy called Automatic Business Reporting. This has already delivered a standard chart of accounts and is currently working on increasing the use of digital invoices in Denmark.

The Nordic Smart Government program, meanwhile, is working on defining the technical requirements of accounting systems and transaction standards to enable a shared Nordic ecosystem of data-driven services.

Maybe, over time, we could even invite other European partners to join. And who knows, the Nordic countries may have set the standard for new EU-initiatives by proactively cooperating in a field where we can be first movers.

“Proactively” is a key word.

When we work with EU-legislation in a Nordic setting, it is good but not enough to compare best practices. We should aim much higher and establish a structured cooperation on how we implement a specific EU-regulation before we decide upon our detailed regulation.

That is exactly what I will propose at the next meeting of the Ministers for Nordic Cooperation. It will be an obvious follow-up on our new strategic action plan for mobility in the Nordic Region and one that could really matter to our businesses.

Looking five years on, I hope that we have established a Nordic version of the Danish EU-implementation Committee – sifting coming EU-legislation to determine which ones could be critical for the integration of the region, and working together as we develop our national implementing legislation.

The Nordic countries are famous all over the world for their minimalistic design. Why not also apply this to our legislation. Simple is beautiful – also when it comes to regulatory policy.

From my personal experience, I know that getting there takes a lot of patience and perseverance. I hope my examples have inspired you to keep up your good work, and now I am looking forward to any questions you may have.

Thank you.