By Julian Hedges
In the long corridors of the Berlaymont, the College of Commissioners wields a power that would be the envy of any executive. In most modern democracies, the executive branch is confined to executing and enforcing laws passed by a sovereign legislature. Yet under Article 17(2) of the Treaty on European Union (TEU), the European Commission enjoys a near-monopoly on the right to initiate legislation. Article 17(2) TEU establishes that “Union legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise.”
Several provisions of the Treaty on the Functioning of the European Union (TFEU) reinforce this prerogative. Article 289 TFEU establishes that the Ordinary Legislative Procedure (OLP) consists of the joint adoption of a regulation, directive, or decision by the European Parliament and the Council on the basis of a Commission proposal. Article 294 TFEU outlines the detailed steps of the OLP, which formally begins when the Commission submits a legislative proposal to Parliament and the Council. Article 293 TFEU even protects the Commission’s prerogative by requiring the Council to act unanimously if it wishes to amend a Commission proposal.
As recently as last year, the European Parliament again challenged the Commission’s monopoly on initiating legislation and struck a deal with the Commission to obtain “equal treatment” with the Council in the legislative process. According to Politico, EU member states are “particularly annoyed” by this agreement and “are threatening legal action.” Yet the Council is targeting the wrong institution.
The Bureaucratic Imperative: Publish or Perish
Originally pitched as a mechanism to protect the “general interest” — read: smaller member states — from national bargaining by larger powers, the Commission’s prerogative has gradually morphed into a structural engine for regulatory expansion. For seven decades, this institutional quirk has hummed along, churning out a regulatory burden that is no longer merely a nuisance; it has become a leaden weight dragging down the competitiveness of European industry and steadily eroding household prosperity.
The policy churn of the Brussels machine is relentless. The Commission is the ultimate gatekeeper. While the European Parliament and the Council may politely “invite” it to act, unelected officials in Brussels ultimately hold the pen. This authority is exercised by a cadre of roughly 32,000 officials, including some 14,700 administrators whose primary raison d’être has increasingly become the production of new rules rather than the promotion of GDP growth or the protection of household wealth.
This systemic overregulation is driven by a perverse internal logic. Commission officials must outline and report their legislative intentions to their hierarchy annually, mid-way through the seven-year financial framework, and at the beginning and end of every political cycle. Yet in many policy areas the EU is already over-legislated — there is simply little logical space left for new rules. A Director-General with no new legislation to propose risks rendering their department redundant. A Commissioner with no new “packages” to present to the College quickly becomes politically irrelevant, losing leverage in the institution’s internal power struggles. In Brussels, to exist is to legislate; to stop legislating is to invite the axe.
The result is a legislative factory that ignores market saturation. Since 1957, the EU has adopted more than 100,000 legislative acts. Since the Maastricht Treaty entered into force in 1994, regulatory output has expanded by roughly 729 percent. As the Draghi Report (2024) notes, the EU adopted approximately 13,000 pieces of legislation in the past decade alone, compared with about 3,000 in the United States. Europe may be out-regulating its competitors, but it is certainly not out-competing them.
This relentless regulatory flow has created an environment in which innovation struggles to survive. In the chemical sector, the REACH regulation has produced the world’s most comprehensive — and most expensive — control system, hollowing out foundational industries as R&D investment migrates to more hospitable jurisdictions. In finance, the dizzying complexity of MiFID II and Basel III has effectively transformed European banks into compliance departments with a small lending operation attached. In 2024, the CEO of a regional European bank confided that the institution now employs more compliance officers than credit officers. Even the humble farmer is not spared: under the Common Agricultural Policy (CAP), the average farmer is estimated to lose seven working days each year to paperwork.
The current institutional incentive structure — which treats the absence of a legislative pipeline as a failure of executive ambition — has produced the so-called “Brussels Effect.” Increasingly, however, this dynamic has generated a backlash: innovative firms simply choose not to offer certain services within the EU market, to the detriment of European consumers and workers.
Nowhere is this more evident than in the digital economy. While the United States and China were busy building global technology champions, the Commission was busy constructing a global rulebook. The GDPR, despite its noble intent, has become a thicket of fragmented implementation that disproportionately burdens smaller firms. The new AI Act adds insult to injury: by regulating the technology itself rather than its applications, the EU has signaled to entrepreneurs that innovation is inherently “high risk.” It is little surprise that recent data show a growing number of European AI start-ups choosing to incorporate in North America to avoid the Commission’s ex-ante regulatory traps.
The Case for Treaty Reform
Unfortunately, the recommendations contained in the Draghi Report arrive too little and too late. A “competitiveness lens” or a new vice-president for simplification is little more than a drop in the ocean.
According to Draghi, the Commission’s mandate should require that any legislative proposal failing a rigorous and independent competitiveness impact assessment be rejected outright. The Commission should also become the guardian of the “innovation principle,” ensuring that every existing and future rule is assessed for its effect on a start-up’s ability to scale or a manufacturer’s capacity to automate. Yet legislating yet another impact assessment risks doing little more than keeping consultants busy.
Similarly, appointing a Commissioner for Implementation and Simplification risks adding yet another bureaucratic layer. The Commission is a Hydra: in attempting to cut legislation, it produces even more of it, as demonstrated by Omnibus I and II, the Digital Omnibus, and the Industrial Accelerator Act.
The current division of powers is a constitutional relic that rewards bureaucratic intervention over economic dynamism. To save the patient, the EU requires radical surgery in the form of fundamental Treaty reform. The primary objective should be to overturn the existing legislative hierarchy by amending Articles 225 and 294 of the TFEU.
Rather than pursuing legal battles or allowing the Commission to escape scrutiny through the creation of yet another vice-presidential portfolio, the Council should initiate a revision of the TFEU that redefines the Commission’s mandate. Under this new constitutional settlement, the European Parliament would be granted a direct right of legislative initiative. Legislation would no longer originate in the closed offices of the Berlaymont to satisfy an official’s performance review. Instead, it would begin on the floor of Parliament, where Members of the European Parliament — accountable to voters — would be required to sponsor any new proposal, debate its necessity, and assemble a democratic majority.
By stripping the Commission of its legislative monopoly, the EU could redirect its executive branch toward its long-neglected mission: completing the Single Market. Its raison d’être should once again be to empower a market of 450 million consumers, using a lighter regulatory touch as a strategic advantage to stimulate productivity and wage growth.
For too long, the Commission has preferred the easy path of proposing new regulations to the difficult political work of dismantling national barriers in services, energy, transport, and telecommunications. A Commission deprived of the power to constantly invent new rules would be forced to focus on enforcing the existing Four Freedoms — particularly in banking and capital markets, where fragmentation continues to drive European savings toward higher returns in the United States.
From Burden to Booster
If the Commission is to remain relevant, it must transform itself from a legislative factory into an engine of European competitiveness, entrepreneurship, and innovation. Its new mandate must recognize that administrative simplification itself is a powerful competitive lever. By aggressively pruning the thicket of regulations, the Commission could reduce the cost of doing business in Europe and stimulate industry without spending a single euro of taxpayer money. A study by the ifo Institute suggests that a fundamental reduction in bureaucracy could raise real GDP per capita by an average of 4.6 percent.
Fortunately, the Commission now has a golden opportunity to transform itself without resorting to forced redundancies. The baby-boomer generation of Eurocrats is retiring en masse; roughly 10,000 staff members — nearly a third of the workforce — are expected to retire during this decade. Given that many departments have already effectively over-legislated their sectors, this demographic shift offers a once-in-a-generation opportunity to refocus the institution’s workforce on completing the Single Market.
Natural attrition provides the perfect mechanism to shrink the lawyer-dominated bureaucracy to a size that no longer has the capacity for constant legislative production. At the same time, the Commission could recruit new staff with hands-on business experience and an entrepreneurial mindset. With a reduced legislative workforce, the institution would simply lack the capacity to maintain its current regulatory output.
The responsibilities of the remaining staff should be fundamentally rewritten. Success should be measured not by the number of pages added to the acquis communautaire, but by the number removed. Advanced tools such as deep learning and agentic AI could be deployed to automate the analysis of directive transposition, transfer regulatory knowledge to new colleagues, and identify outdated legislation that should be repealed.
EU leaders must pursue a fundamental constitutional reset: strip the Commission of its legislative initiative and harness the demographic dividend to redirect its administration toward a single overriding objective — a truly frictionless Single Market. By transforming the Commission from an overzealous legislator into a focused catalyst for competition and innovation, Europe can stop merely writing the rules of the world and start leading it again.
It is time to take the pen away from the policy officers, give Europe’s industries room to breathe, and offer its citizens the chance to afford life once more.
Julian Hedges is a pen name. The author is known by Brussels Report.
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