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The OECD launched its first Economic Survey of the European Union noting that member states need to provide a fresh impetus to clear the rules and red tape which are stifling competition and blocking cross-border trade and investment.
The report highlights good progress in financial markets but calls for changes to
Chapter 3. Building competitive financial markets
Chapter 4. The regulatory framework at the community level
Effective regulation underpins the single market. EC initiatives have been crucial in facilitating cross-border trade by smoothing out differences in regulations and standards across member states. The challenge in coming years is to keep up the momentum and ensure that interventions are well chosen, effective and implemented at minimum cost. This involves careful thought about whether intervention is necessary, what the measure is trying to achieve and what the best way to meet those objectives might be. Regulation is not always the best option. All interventions have compliance costs, and over-regulation and poorly designed laws can create more problems than they solve. This places a premium on sound regulation in the first place, especially ones based on principles rather than being overly prescriptive so that they are flexible enough to adapt to unforeseen economic and technological developments.