Spain's Regulatory Burden Slows Job Creation, Critics Say

Spain's Regulatory Burden Slows Job Creation, Critics Say

Spain's regulatory landscape is facing criticism due to its complexity and volume. A surge in new rules is slowing job creation and hindering business dynamism, particularly for small and medium-sized enterprises (SMEs). Since 1979, over 400,000 provisions have been approved, with 11,775 new regulations added in 2022 alone - that's 32 per day or one every 45 minutes. This regulatory density negatively impacts business dynamism in some sectors. A 10% increase in regulatory volume leads to a 0.5% drop in employment in small companies. The lack of coordination and overabundance of rules can discourage investment and technology adoption. Additionally, regulatory heterogeneity across regions and sectors adds complexity and costs for companies operating in multiple areas. Experts, including Juan S. Mora-Sanguinetti, criticize the authorities responsible for implementation and coordination, such as the Ministry of Economy and the Ministry of Industry, and regulatory agencies. They urge for a clearer regulatory framework, effective evaluation mechanisms, and better coordination to support business creation, job growth, and overall competitiveness in Spain.

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