Dangerous double standards: How the EU Commission is failing on the internal market and bureaucracy

1,456 new laws: Why the single market is sinking into EU bureaucratic chaos

Draghi sounds the alarm: Is EU bureaucracy destroying Europe's single market?

The European Union is caught in a dangerous paradox. While EU Commission President Ursula von der Leyen declares cutting red tape her top priority and aims to strengthen the European single market, Brussels authorities are simultaneously churning out a record number of new regulations. In 2025 alone, almost 1,500 new legal acts were adopted – a fatal contradiction that increasingly threatens Europe's competitiveness on a global scale. High-profile experts like Mario Draghi and Enrico Letta have long been sounding the alarm: if the EU fails to close the gaping chasm between political ambition and administrative reality, the continent's most ambitious economic project risks suffocating under its own regulatory zeal. This is an unflinching look at Brussels' "omnibus" strategy, unresolved structural problems, and the true record of European deregulation policy.

Brussels' double standards: promises of reform versus regulatory reality

The European Union finds itself in a paradoxical situation: Never before has there been such high-profile public discourse in Brussels about reducing bureaucracy – and never before have so many new regulations been produced. Commission President Ursula von der Leyen has made simplification and competitiveness the central theme of her second term. However, reality, as measured by reliable data and independent audit reports, paints a more sobering picture: A gap exists between political ambition and administrative reality, which is increasingly becoming a strategic liability for the European economy.

Background: Why Europe urgently needs to act

Europe's structural competitiveness problem is not new, but it has worsened dramatically in recent years. The single market, the most ambitious integration project in European history, encompasses 450 million consumers, some 26 million businesses, and a combined economic output of €17 trillion. Since its inception, it has created over 3.6 million jobs and generated significant gains in prosperity, according to the Commission. However, in recent years, unmistakable cracks have appeared in the foundations of this project.

In September 2024, former ECB President Mario Draghi presented a report on European competitiveness, the findings of which were alarming: To remain competitive globally with the US and China, the EU would need to invest at least an additional €800 billion annually. A year after the report's publication, frustration among businesses and citizens over the lack of action grew noticeably. In September 2025, Draghi himself again painted a bleak picture for the EU economy and urged swift action.

In parallel, former Prime Minister Enrico Letta presented a widely noted report on the future of the EU single market in April 2024. In it, he called for a new, fifth freedom – alongside goods, services, capital, and people – for research, innovation, and knowledge, as well as a fundamental completion of the Capital Markets Union. The figures Letta presented illustrate the scale of the problem: Intra-EU trade in goods as a share of GDP fell from 23.5 percent in 2023 to just 22.0 percent in 2024. Cross-border trade in services within the EU amounts to a modest 7.9 percent of GDP – a pitiful figure given its actual potential. In 2024, total intra-EU trade fell to €4.025 trillion, representing a decline of 2.2 percent compared to the previous year.

These figures signal not just an economic downturn, but a structural erosion of single market integration. At the same time, the number of infringement proceedings against member states that are not properly implementing EU single market rules is rising. The finding is clear: the single market is not functioning as it should.

Mission “Competitiveness” (The Draghi Report)

Since Mario Draghi, former ECB chief and Italian prime minister, presented his roughly 400-page report on the future of European competitiveness in September 2024, commissioned by EU Commission President Ursula von der Leyen, he has been virtually constantly engaged in defending and explaining it. As a high-ranking advisor to the European Union, he travels to EU summits, addresses the European Parliament, and meets with heads of state and government as well as industry representatives. His main objective at present is to convince EU member states to actually implement his radical demands (such as annual investments of €800 billion and the issuance of joint EU debt) and not let them simply gather dust on a shelf.

High-ranking advisor and “warning voice”

Draghi currently functions as a kind of unofficial chief economist and geopolitical strategist for the European Union. Particularly after the election of Donald Trump as US president and in light of the economic threat posed by China, Draghi's expertise is in high demand in Brussels and other European capitals. He tirelessly warns that Europe will slide into a "slow agony" (a gradual decline) if it does not immediately invest massively in defense, technology, and the single market.

Academic and civil society appearances

In addition to providing direct political advice, Draghi regularly gives high-profile speeches (e.g., at think tanks, universities, or forums such as the one in Davos). He uses these public appearances to exert pressure on national politics in Europe – especially on countries like Germany, which are skeptical of new EU debt.

Mario Draghi is currently a kind of elder statesman and Europe's chief economic policy analyst. Although he no longer has decision-making power, his immense authority and his uncompromising reports set the agenda for current and future EU legislation.

Von der Leyen's strategic framework: The compass for competitiveness

Ursula von der Leyen responded to this finding at the beginning of her second term with a new strategic framework. On January 29, 2025, the Commission presented the so-called Competitiveness Compass – a strategic document defining the Commission's economic policy priorities for the 2024-2029 legislative term. The document explicitly builds on the analyses of the Draghi and Letta reports and identifies three overarching priorities: closing the innovation gap with the US, completing the Single Market, and strengthening economic security and resilience.

The compass is precise in its diagnosis and ambitious in its goals. It explicitly acknowledges that excessive regulation, fragmented markets, and the lack of scalability of European companies are the core problems. It sets the goal of reducing the administrative burden on businesses by at least 25 percent by 2030 – and even by 35 percent for small and medium-sized enterprises (SMEs). On paper, this sounds like a genuine change of course. The question is whether these words will be followed by action.

The Omnibus Instrument: Reducing Bureaucracy in Practice

The most important operational instrument for reducing bureaucracy is the so-called omnibus strategy. Under this strategy, the Commission combines amendments to several existing legal acts into a single legislative package to eliminate inconsistencies, reduce reporting obligations, and lower implementation costs. Ten such omnibus packages were presented in 2025 alone.

The Omnibus I package: The most well-known example

The most politically significant omnibus package of 2025 concerns sustainability reporting. Proposed by the Commission in February 2025, it includes far-reaching changes to four directives: the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy Regulation, and the EU Deforestation Regulation (EUDR). The core reform of the CSRD is spectacular: the reporting obligation will henceforth only apply to companies with more than 1,000 employees and a turnover exceeding €450 million. This will exempt approximately 80 to 90 percent of the companies originally covered by the directive from the obligation. In December 2025, the European Parliament and the Council reached a provisional agreement on this package during the trilogue negotiations.

The Commission estimates the savings from the Omnibus Packages at around €11.9 billion for businesses. Elsewhere, figures of up to €37.5 billion by 2029 are cited. By the beginning of 2026, Omnibus Packages II and III had already entered into force, while Packages IV to VI were undergoing the Council and Parliament procedures, respectively, and Packages VII to X were still being reviewed by both institutions. Further packages in the areas of energy, taxation, and citizens' rights are planned for 2026.

Methodological weaknesses and political criticism of the omnibus approach

The omnibus method is not without controversy. The Bundestag's specialist magazine "Das Parlament" has already formulated fundamental criticisms of the approach: Linking completely unrelated regulatory areas in a single legislative package makes parliamentary oversight more difficult and encourages extraneous political deals. Combining environmental law, commercial law, financial law, and social law in a single voting package does not comply with the principles of transparent and coherent legislation.

Furthermore, there is criticism from civil society and environmental organizations: The Omnibus I package on sustainability reporting is seen as a de facto dismantling of the Green Deal. The drastic reduction in the scope of the CSRD means that supply chains and climate risks for the vast majority of the European economy will no longer be systematically recorded and disclosed. The German Development Institute explicitly warned: Cutting red tape must not come at the expense of climate policy. Whether the Commission is actually pursuing meaningful simplification here or burying politically inconvenient sustainability standards under the guise of deregulation remains one of the central points of contention in 2025.

The regulatory paradox: More laws despite promises to reduce regulations

The core problem with von der Leyen's deregulation strategy lies in a fundamental discrepancy between announcements and reality, which can be measured in hard numbers. In 2025, the EU Commission adopted a total of 1,456 legal acts – the most since 2010. Broken down by category, the picture is as follows: 21 directives, 102 regulations, 137 delegated acts, and 1,196 implementing acts. This corresponds to an average of approximately four new legal acts per working day.

The Federation of German Industries (BDI) and the employers' association Gesamtmetall have sharply criticized this development. Gesamtmetall's managing director, Oliver Zander, spoke in January 2026 of a strangulation of companies and stated that the EU Commission had clearly failed to achieve its goal of reducing bureaucracy. Similar criticism came from the German Confederation of Skilled Crafts. The accusation is serious: While simplification is discussed publicly, the regulatory burden continues to grow relentlessly through the back door of delegated acts and implementing regulations.

The role of delegated acts and implementing regulations is particularly problematic. These secondary legal instruments are not created through the regular co-decision procedure between Parliament and the Council, but are enacted by the Commission – or even by agencies it has appointed – on its own initiative. Former EU Industry Commissioner Günter Verheugen has already warned of a worrying shift in power towards an unchecked bureaucracy that is hardly democratically accountable. Of the 1,456 legal acts planned for 2025, 1,196 alone were implementing acts, which were adopted without full parliamentary debate.

The deregulation commission's program for 2026 met with mixed reactions. The German Nature Conservation Ring and other environmental associations criticized the fact that the focus of the announced simplifications was once again on environmental and social standards, rather than on actual administrative simplifications for companies. At the same time, business associations complained that the announced measures were far too timid to noticeably improve the competitiveness of European industry.

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The new single market strategy: ambitions and its limits

On May 21, 2025, the Commission presented its new EU Single Market Strategy – the first comprehensive strategy document of its kind in years. The document identifies five key areas for action and sets concrete priorities. It names the so-called “Terrible Ten” – the ten biggest structural barriers in the Single Market that hinder trade, investment, and economic integration. These include fragmented product approval procedures, differing national consumer protection and tax rules, a lack of mutual recognition of professional qualifications, and heterogeneous national regulations in the services sector.

A novel institutional feature of the strategy is the so-called Single Market Sherpas in the member states: National coordinators are tasked with identifying implementation deficits and informing the Commission directly. This sounds like a useful steering instrument. However, it remains to be seen whether these Sherpas will actually exert political influence or simply become more well-paid Brussels observation posts.

The “Terrible Ten” in the EU single market

Here is a brief list of the “Terrible Ten” – the ten biggest structural barriers in the EU single market, which the European Commission identified in its new Single Market Strategy on 21 May 2025:

• Complex EU regulations – an overly complicated set of rules creates legal uncertainty in cross-border business transactions, especially since many EU requirements are implemented differently at the national level
• Lack of self-responsibility on the part of member states – failure of national governments to consistently apply the internal market rules
• Complicated business start-up and management – ​​bureaucratic hurdles in cross-border establishment and ongoing business operations
• Limited recognition of professional qualifications – lack of mutual recognition hinders the cross-border mobility of skilled workers
• Delays in standardization – long development times for common standards stifle innovation and competitiveness
• Fragmented regulations for packaging, labelling and waste – diverging national rules and different EPR systems – hinder the free movement of goods
• Outdated harmonized product regulations and insufficient product conformity – existing legal frameworks still inadequately consider digital solutions
• Restrictive and divergent national regulations for services – heterogeneous national regulations hinder cross-border service exchange
• Complex procedures for the posting of workers – excessive bureaucracy, especially in low-risk sectors, places a disproportionate burden on companies
• Unjustified territorial supply restrictions prevent traders from selling products from one member state in another, thus increasing consumer prices

These ten obstacles were identified based on extensive consultations with economic stakeholders and are considered the strategy's "first priority." The Commission's overarching goal is to reduce bureaucracy by 25% overall and by 35% for SMEs by 2029.

Capital market integration: The Savings and Investment Union

A second key project under the umbrella of the Single Market reform is the Savings and Investments Union (SIU), presented on March 19, 2025. It is intended to replace the existing fragmented Capital Markets Union and structurally improve the mobilization of private savings for productive investment in Europe. Europe possesses enormous private savings, but due to a lack of functioning capital markets, these savings largely lie dormant in unproductive national government bonds or low-interest savings accounts, instead of flowing into innovation and growth. In November 2025, the Commission published supplementary recommendations and a concept for standardized savings and investment accounts at the European level.

The German Insurance Association (GDV) welcomed the initiative in principle, but criticized the plans for being too limited: Without fundamental reforms to national insolvency laws, tax rules, and capital market regulations, the SIU would remain an ambitious declaration of intent without sufficient structural impact. The assessment of KPMG experts complements this view: While the SIU is an important strategic impetus, it must be accompanied by concrete legislative measures in the areas of fund regulation, investor protection, and cross-border pension schemes.

The service deficit: Thirty years of delayed integration

The most critical assessment of the single market's performance comes from none other than the European Court of Auditors. In its special report 13/2026 from March 2026, the EU's independent auditing body arrives at a devastating conclusion: the Commission's measures for integrating the single market for services remain inadequate.

The figures speak for themselves: Only 20 percent of services are provided across borders within the EU. Yet the service sector accounts for around 70 percent of EU GDP – meaning that the vast majority of the European economy is practically excluded from the single market or at least highly fragmented. Even more serious: 60 percent of the trade barriers in the services sector identified by the Court of Auditors and the Commission itself as early as 2002 still existed in 2023. Two decades of political announcements, action plans, and strategy papers have done little to change this fundamental structural weakness.

The Court of Auditors found that the Commission lacked a clear strategy and a systematic procedure for specifically addressing the worst barriers to trade in services by 2025. This is a serious institutional finding: the core problem is apparently not malice, but a structural lack of planning. Business associations and chambers of skilled crafts confirm this assessment from their practical experience: craft businesses, engineering firms, lawyers, insurance companies, and IT service providers regularly encounter bureaucratic and regulatory hurdles in their cross-border activities in Europe that have been in place for decades.

A 2024 study by the ifo Institute calculated the economic potential that genuine integration of EU trade in services would unleash: significant gains in prosperity that could permanently raise the GDP level of most member states. The Court of Auditors goes even further, estimating that ambitious reforms could enable GDP growth of up to 2.5 percent by 2027. Given Europe's current weak growth, these would be enormous gains – if only the political will for implementation existed.

Single Market Report 2026: An alarming report card

The Commission's annual EU Single Market Report for 2026, published in February 2026, also delivered worrying signals. Of the key indicators collected, six out of 27 had deteriorated compared to the previous year, while 15 others remained unchanged. Among the deteriorating indicators was private investment, which declined in 2024 despite political announcements of reforms. The number of infringement proceedings, through which the Commission compels Member States to implement Single Market rules, increased – a sign that voluntary compliance with European Single Market law is declining.

What is remarkable is the discrepancy between what the Commission communicates publicly and what its own reports reveal. While Commission President von der Leyen emphasizes progress in press conferences and EU summit declarations, her own officials are sounding the alarm internally and in audit reports. This institutional dissonance is itself a finding: it points to communication and governance deficits within the Commission itself.

The DIHK survey on barriers to the single market from 2024 shows, from the perspective of German businesses, that after more than three decades, the single market remains highly fragmented at many practical interfaces. Companies report differing national implementations of European directives, divergent product standards despite formal harmonization, and bureaucratic hurdles when posting employees to other member states.

Digital Single Market and Data Protection: The Next Deregulation Battlefield

In autumn 2025, the Commission presented another controversial package: the Digital Omnibus, which, under the guise of simplification, also included amendments to the General Data Protection Regulation (GDPR). Data protection organizations and civil rights activists sharply criticized the Commission for using deregulation as a pretext to weaken citizens' rights. In February 2026, the taz newspaper and other media outlets reported in detail on how European institutions, under the guise of deregulation, were effectively curtailing data protection for consumers. This exemplifies the fundamental tension inherent in Omnibus policies: what represents a simplification for businesses can mean a reduction in protection for citizens and employees.

In a 2026 study, the German Institute for International and Security Affairs (SWP) analyzed the growing role of online platforms in the EU single market and pointed out that deregulation in the digital sector without accompanying competition policy can lead to market concentration and structural disadvantages for European companies. A deregulation agenda focused solely on bureaucracy risks overlooking systemic risks.

Balance sheet: Between the will to reform and institutional inertia

A critical overall assessment of past activities must be nuanced. It would be unfair to claim that the Commission is doing nothing at all. The Omnibus Strategy is conceptually a sound approach for systematically scrutinizing historically developed layers of regulation. The new Single Market Strategy identifies the right problems. The Competitiveness Compass establishes a clear strategic framework. The Savings and Investment Union addresses a real capital shortage.

However, a structural gap traditionally exists in Brussels between diagnosis and treatment – ​​and this gap has not narrowed under von der Leyen, but rather widened. The reasons are complex:

First, the problem of institutional multi-level governance remains unresolved. The Commission can make proposals, but implementation lies with the 27 Member States, each with its own interests and implementation capacities. The increasing number of infringement proceedings shows that even already adopted internal market rules are not being fully applied.

Secondly, while the Commission's omnibus packages do bring simplifications on the one hand, they also generate new regulatory complexity through delegated acts and implementing regulations – without this being publicly apparent. The 1,456 new legal acts in 2025 alone counteract any simplification effect.

Thirdly, there is a lack of clear priorities. Which of the numerous obstacles should be removed first? Which reforms will yield the greatest economic impact per unit of political capital? An honest answer to this question would require difficult compromises with member states that are unwilling to relinquish certain protective rules – for example, in the services sector. These political conflicts will not be resolved simply by issuing new strategy papers.

Fourthly, there is the problem of temporal inconsistency: reforms that take years to have an effect are overshadowed by new regulatory waves at short intervals. Under these conditions, companies cannot rely on stable framework conditions and hold back on investments – as the 2026 Single Market Report precisely documents in the declining private investment figures.

International context: Europe is losing time

The urgency of the problem grows with increasing international competitive pressure. While Europe debates deregulation concepts, the US, under the Trump administration, implemented aggressive deregulation measures—with immediate consequences for the competitive position of American companies in technology, energy, and financial services. China is investing heavily in industrial capacity and subsidizing strategic sectors. The European approach of a rules-based, consensus-oriented reform process may be too slow for a world order in which geopolitical and economic shifts occur in ever shorter cycles.

The Letta Report made this clear: Europe doesn't need more strategy papers, but rather a culture of implementation that produces results. Enrico Letta explicitly demanded that existing rules be consistently applied and not undermined by special national interests. Three decades of the single market have shown that while the political will for integration is high in summit declarations, it regularly falters in the arduous daily work of implementation.

What's really missing

The Commission under Ursula von der Leyen drew the right conclusions from the Draghi and Letta reports and formulated a respectable strategic framework. That's no small feat. However, three structural deficiencies remain unresolved and are likely to permanently limit its effectiveness:

Firstly, there is a lack of consistent regulatory restraint. As long as the Commission presents omnibus packages for simplification on the one hand and produces the record number of 1,456 new legal acts on the other, the net effect for companies is at best neutral, but tends to remain burdensome.

Secondly, a realistic implementation agenda for the single market for services is lacking. The fact that 60 percent of the barriers identified in 2002 still exist in 2023 is an institutional failure that cannot be resolved through strategy papers, but only through disciplined treaty enforcement and, where necessary, through conflicts with recalcitrant member states.

Thirdly, Europe needs a fundamental reform of capital market integration that goes beyond symbolic SIU announcements. The idea of ​​mobilizing private European savings for European innovation is sound – but it has so far failed due to national tax, inheritance, and insolvency rules that no strategy paper from Brussels can remove as long as the member states lack the political will.

The measure of the Commission's success under von der Leyen will not be whether it produces impressive documents – Europe has plenty of those. The measure will be whether, in five years, the share of cross-border trade in services has increased, whether private investment in innovation has grown, and whether companies are spending noticeably less time on bureaucracy. These figures, not press releases, will show whether the will to reform was genuine.