European red tape costs hit one trillion euros

Date: 27th May 2009

Red tape and employment regulations on European businesses in the past 11 years has cost enterprises one trillion euros, it has been revealed.

An investigation by the industry body Eurochambres found that the annual cost of bureaucratic procedures is now equal to 12 per cent of the entire European Union's (EU) gross domestic product.

David Frost, director general of the British Chambers of Commerce (BCC), said: "Businesses are facing the toughest economic environment for a generation.

"Company cashflow is being squeezed and unemployment is growing as a result."

Mr Frost added that the EU must "get serious" about cutting the amount of regulatory burden businesses are faced with, which could be done by introducing a new moratorium on employment law.

The findings of an investigation by the BCC published earlier this month showed that 47 per cent of smaller firms routinely experience difficulties with employment law.