Source: Harry Haysom, “The EU Wants To Unshackle Its Economy. For Real This Time,” The Economist, May 4, 2026.
Commentary: Overregulation in the European Union (EU) has contributed to a slowing of economic growth and reduced competitiveness for firms. In fact, these regulations, many of which apply to data governance and privacy, human rights issues, and environmental policy, have cost European businesses about $176 billion annually, equivalent to almost 1 percent of the bloc’s GDP, and this cost doesn’t include the lost innovation and forgone growth that may have occurred if those rules were not in place. To make matters worse, the European Commission is still in discussions to introduce more rules, which could add another $94 billion to that total. This excessive regulation has cost the EU economy greatly, contributing to its lagging economic growth over the past two decades, during which Europe’s GDP grew by less than 1 percent annually. In recognition of this, the European Commission is taking steps to reduce the regulatory burden on firms by exempting smaller businesses from some of the stringent reporting requirements in specific rules and by deepening the economic integration between EU member states. The International Monetary Fund estimates that deeper integration within the EU could increase the bloc’s GDP by over 3 percent over the next decade.
