Since 2005, we in the European Commission put better regulation right at the heart of our economic reform strategy. We are making sure that all new European Commission initiatives are of the highest quality, and we are modernising and simplifying the existing stock of European legislation.

We know that the regulatory environment is crucially important for business. We are convinced that European regulations have significantly strengthened the competitiveness of our industries, for example by creating an internal market replacing 27 different national frameworks. But we are also convinced that there is scope for further improvement, notably to ease life for SMEs.

Contrary to the picture sometimes portrayed, "Brussels" is not about a constant stream of new and unnecessary regulations that are intended to make life more difficult. In fact, the opposite is the case. Regulations are proposed to produce benefits for the future. In order to ensure this, there is now a culture in the EC that questions the need for every new regulatory proposal before it is put forward.

At the same time, this culture ensures that if a proposal is needed, it is proportionate, respectful of the principle of subsidiarity, effective and efficient and not unnecessarily burdensome.

Our latest better regulation package which was published a few days ago demonstrates that we are not just paying lip service to these principles. We can show tangible benefits for European business such as the Single Payments Area. A more efficient and competitive payments market will make any payments within the European Union as easy, cheap and secure as payments within a member state are today. This initiative alone will lead to savings of up to €28 billion per year for the EU economy.

Or the new paperless customs system (e-customs) will create a European electronic system for data exchange between public authorities and companies. These streamlined customs procedures using automated and interlinked customs systems will boost international trade. When fully operational, the integrated system should save businesses €2.5 billion per year.

In January 2007 we declared war on administrative burdens with an action plan to cut the burden on businesses in the EU by 25 per cent by 2012. This is an ambitious but realistic target. It was recognised also by the European Council last year which has called on member states to set comparably ambitious targets - a call already followed by 12 member states. Economic studies suggest that the economic benefits of a concerted European and national effort to cut red tape by 25 per cent will be in the region of an additional 1.5 per cent of GDP (or €150 billion).

To kick-start this process, we proposed a first set of fast track actions early last year. This means an estimated €1.3 billion in savings for companies. Half of these are now already on the statute book, adopted in record time. For example, more than 600,000 public limited liability companies will no longer have to order costly expert reports concerning the draft terms of mergers or divisions of small enterprises. More than 300,000 freight carriers will no longer have to carry separate transport documents.

And we will continue our fight against red tape also this year. A further 45 new measures will be presented this year, producing further concrete, tangible benefits.

We will propose to simplify the current rules on waste electrical goods to make it easier for manufacturers, retailers and consumers to meet their environmental obligations. We will bring about a significant simplification of the current biocides legislative framework and address concerns regarding complexity and costs.

We will repeal some 50 technical directives in the automotive sector and replace them, where appropriate, with references to UNECE (United Nations Economic Committee for Europe) Regulations. Furthermore, we will alleviate the statistical reporting of economic operators (Intrastat) which will be of great benefit, in particular for small- and medium-sized enterprises.

And last but not least, we propose to consolidate and expand the areas in which national, regional and local authorities can grant support without needing the European Commission's prior approval. To that effect, we will simplify the general block exemption regulation on state aid.

We now also insist that all new major Commission proposals benefit from an impact assessment. The assessment provides a thorough analysis of all significant economic, social and environmental impacts. Trade-offs and synergies are clearly spelt out and taken into account in our decision-making process. We have set up an independent "impact assessment board" to monitor and provide advice on impact assessments. This has led to significant improvements in the quality of our work. It is a stepping stone towards a real culture of proportionality and subsidiarity in regulation.

Better regulation is not a one-off event but an ongoing process. Achievements so far have already resulted in significant savings for European business and citizens. We are however determined to keep fighting red tape at European level. We call on the member states of the European Union to carry on their fights with the same vigour at a national level. That way, our EU economies are capable to face the challenges of a changing world economy and to seize its new emerging opportunities.

Prof. Barroso and Mr Verheugen are president and vice-president respectively of the European Commission.