Greens, socialists hope centrist alliance will limit scale of EU deregulation

MEPs overwhelmingly backed today a proposal to delay new EU rules of corporate sustainability reporting and mandatory due diligence on the environmental and social impacts of trading partners, with the Greens joining a centrist alliance of social democrats, liberals and conservatives that they hope will strengthen the centre ground of EU politics.

The ‘stop the clock’ measure proposed by the European Commission on 26 February was rushed through using an emergency legislative procedure on the grounds of an imminent threat to the competitiveness of European businesses, an issue that the president of the EU executive, Ursula von der Leyen, has made the hallmark of her second term.

The legislation adopted today is the first part of what the Commission has said will be a series of ‘omnibus’ proposals to ‘simplify’ the administrative burden for firms operating in the EU, but which critics – unions and environmental campaigners among them – fear will turn into a drastic deregulation targeting worker rights and Green Deal legislation adopted under von der Leyen’s first presidency.

Governments now have an extra year, until July 2027, to incorporate the due diligence rules into national law, while the sustainability reporting directive will only take effect in 2028, and a year later for small firms with fewer than 250 employees. In the meantime, legislators will now have time to discuss a proposal to limit the content and scope of the laws.

The Greens, concerned at the extent to which the forthcoming negotiation might lead to further watering down of the rules, welcomed the four-party agreement with the conservative European People’s Party, liberal Renew and centre-left Socialist & Democrats they say will limit potential for parties further to the right to fan the flames of a bonfire of red tape.

Staying at the table

“We are extremely unhappy with the Commission's Omnibus proposal. It makes hasty and detrimental changes to laws that have only just been adopted,” Greens co-chair Terry Reintke said. “By staying at the negotiation table, we will do our utmost to prevent the worst and defend the Green Deal.”

The S&D group made similar noises. “We are ready to continue negotiating with pro-European forces during the legislative process, with the clear stance that simplification cannot come at the cost of people and planet,” said Lara Wolters, the group’s lead negotiator on the file.

The essence of the agreement between the four groups is that they will try to negotiate a common position on the omnibus proposals in informal talks, then undertake not to table amendments individually, or support those tabled by the hard left or the large contingent of MEPs to the right of the EPP.

EPP vice-chair in charge of the omnibus process Tomas Tobé also hailed the cross-party cooperation. “It’s clear that constructive forces in Parliament are ready to begin work on real simplification measures that will boost Europe’s competitiveness for the long term,” he said.

Renew group lawmaker and former environment committee chair Pascal Canfin said that failure to agree on the delay that had already been endorsed by EU governments last week would've meant firms left “in the dark” about what data they would have to report next year.

The Trump challenge

“This would be adding uncertainty in an uncertain world. Yesterday, Trump slapped the world with arbitrary tariffs,” Canfin said.

As Brussels digested the news of the US president’s effort to shake up world trade, concerns were raised over the real motivation for a 20% punitive tariff on EU goods, far in excess of aggregate trade tariffs in the other direction.

The head of the parliament’s international trade committee, Bernd Lange, told reporters this morning that Trump clearly had EU legislation in his sights, and that it was “not on the table” in any future negotiations.

The European Commission sent a similar message, with a senior trade official asserting that talks with Washington, as in any trade talks, would not involve the easing of EU regulations.

“We do not lower our standards,” the official said. “Whenever we protect consumers, or the environment, we have legitimate legislation that is non-discriminatory,” he said.