There is a ‘vibe shift’ going on around economic growth and deregulation. With new governments in the US and UK making radical reforms to pare back the regulatory state and foster growth and investment, the EU risks being left behind.
Poland is positioning itself as the driving force behind a revival of European economic growth. In an address to the European Parliament, Polish Prime Minister Donald Tusk made a heartfelt plea for deregulation and growth.
“We need to change the status quo, we need to propose to Europe a big campaign of deregulation,” he said. “The stakes are very high, our competitiveness is at stake.”
Deregulation is no longer the preserve of the populist right. Poland’s center-right prime minister and even Britain’s center-left government are determined to pursue economic growth to elevate European living standards, close the gap with America, and restore the Old World’s competitiveness.
Regulation is a necessary part of modern society and good governance. Light and smart regulation should set the right framework for people and businesses to interact with each other in order to succeed in their endeavors and be protected against abuses and undesirable developments. However, experience shows us regulation sometimes creates obstacles, rather than enabling fruitful activity. Europe has a lot of work to do to get its regulatory environment back to a state where growth can flourish, rather than strangling the economy with red tape.
Europe has a competitiveness problem — and much of it is down to red tape. Small and medium-sized businesses (SMEs), which are the backbone of Europe’s economy, face too many rules and too much paperwork. Nevertheless, Poland has shown this need not be the case. By reducing unnecessary bureaucracy, Poland has made it easier for businesses to grow and succeed. It is time for Europe to follow Poland’s lead and provide SMEs with the freedom they need to succeed.
Poland has become a shining example of how to support small businesses. According to the 2024 Bureaucracy Index, it is the most business-friendly country in Europe with the smallest administrative burden. In Poland, starting an industrial company takes just 19 hours of paperwork. Poland’s success is proof simplifying processes works. It is a lesson other countries can learn from.
What has Poland done right? It is all about keeping things simple. The government has made rules easier to follow and cut back on unnecessary steps. They even have a “one in, one out” rule: for every new regulation added, an old one has to go. This prevents rules from piling up and creating confusion. Poland also uses digital tools so people can register businesses online and file taxes quickly. These changes save time and money, letting business owners focus on what matters most: growing their companies.
Poland’s approach is a clear roadmap for other European countries. Reducing red tape and investing in technology can transform the way businesses operate. Governments should see this as an opportunity to boost their economies. After all, SMEs create most of the jobs and drive innovation across Europe.
Following Poland’s example is essential for Europe. With the US and UK courting investment and chasing economic growth, Europe needs to get back on its feet. Dramatic deregulation in other countries could drive business investment away from Europe. Since the 2008 financial crisis, the US economy has grown at around double the rate of Europe’s. America is leaving us in the dust. Europe cannot afford to waste any more time.
Deregulation does not have to mean compromising on standards or bringing about other negative consequences. Poland’s success shows measuring bureaucracy using tools like the Bureaucracy Index can highlight problems and push governments to improve. Healthy competition between countries to lower their red tape can drive real change.
This is not just about economics; it is about fairness. Small businesses do not have the resources to deal with complex rules. By cutting unnecessary barriers, governments can give everyone a fair chance to succeed.
Poland’s red tape revolution offers a blueprint for Europe’s future. If other countries adopt similar changes, SMEs will grow, innovate, and compete on a global scale. The potential rewards are huge. It is time for Europe to act, cut the red tape, and unlock the full potential of its small businesses. The continent’s future depends on it.
Written by Lika Kobeshavidze – an analytical journalist and a writing fellow with Young Voices Europe, specialising in EU policy and regional security in Europe. She is currently based in Lund, Sweden, pursuing advanced studies in European Studies.