(BRUSSELS) - The 27 EU nations on Monday supported a move to reduce the burden of EU paperwork for companies by 25 percent by 2012, while stopping short of making promises on national bureaucracy.

According to the European Commission, the EU's executive arm, the move will lead to a 1.5-percent increase in gross domestic product (GDP).

Germany, which holds the bloc's rotating presidency, the Commission is calling for the re-tape busting measure to be adopted at an EU summit in Brussels next month.

Convinced of the "political" importance of the initiative, national ministers in charge of competition enthusiastically backed the scheme at a meeting here Monday.

However the Commission would also like to see the red tape cut on a national level.

"Studies show that between 50 percent and 60 percent of administrative costs arise at the national level," argued EU Industry Commissioner Guenter Verheugen.

"We therefore feel it is essential to act on two levels, the community level and the national level".

Austria and Sweden, heeding the appeal, are promising to reduce national administrative charges by 25 percent by 2010. However 15 fellow EU nations are calling for caution.

Greece, along with Italy, Spain and Portugal, has stressed that any cut in business forms at a national level "should be left to the discretion of member states".

"They must have the power to fix their own objectives,according to their individual situations, which differ from state to state," said a Greek spokesman.

Faced with such opposition, the Commission has said that it will propose only that member states work towards a 25 percent reduction, with each doing what it can to cut "the administrative structure".

Despite the non-bonding nature of the proposals, the Commission has identified 13 areas for special attention, including company, law, employment relations, taxation/VAT, statistics, agriculture and transport.

Competitiveness Council - 19.02.2007 - background information

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