Merz attacks EU overregulation ahead of Copenhagen summit

German Chancellor Friedrich Merz has launched his most direct attack yet on the European Union's legislative output, telling business leaders from his own Christian Democratic Union and Christian Social Union alliance that he intends to put a "stick in the wheels" of the Brussels machine. The remarks, delivered on Friday, signal a deliberate escalation in tone from a chancellor who has been in office since May and who belongs to the same centre-right political family as European Commission President Ursula von der Leyen.

A calculated confrontation

Merz chose his audience carefully. Speaking to businesspeople aligned with the CDU/CSU, he framed the critique as a defence of European competitiveness rather than a rejection of European integration. "You know that I am a truly committed European," he said, "but the way things have been going in the European Union in recent years, with the European Union regulating more and more and more, cannot continue." The formulation allows him to claim the pro-European mantle while demanding a halt to what he portrays as an uncontrolled regulatory expansion.

The chancellor said he would bring a "precise list of demands" and "very concrete demands" to the informal meeting of EU heads of state and government in Copenhagen next week. That gathering, which falls outside the formal European Council calendar, is traditionally used for frank political exchanges without the pressure of immediate conclusions. Merz's decision to preview his intervention suggests he wants the issue on the agenda before leaders arrive, forcing a debate that the Commission would prefer to manage on its own terms.

The Commission's defence

The Commission's response came quickly. Spokesperson Anna-Kaisa Itkonen said on Saturday that the executive had "already put forward six major simplification proposals in this mandate" and would deliver "another two this year," calling the drive to reduce bureaucracy a "high priority." The count refers to packages such as the omnibus simplification proposals for sustainability reporting, due diligence and taxonomy rules, as well as sector-specific relief measures for agriculture and small businesses. Whether those packages amount to a genuine reduction in compliance burden or merely a reorganisation of existing requirements is a point of contention between the Berlaymont and national capitals.

The Commission's narrative is that it is already doing what Merz demands. His narrative is that the machine keeps producing regardless. Both cannot be fully true. The tension reflects a structural problem: the Commission initiates legislation, the Parliament and Council amend and adopt it, and the Commission then monitors implementation. When national leaders complain about overregulation, they are often criticising laws their own ministers approved in the Council or their MEPs supported in Parliament.

A party colleague in the crosshairs

The personal dimension complicates the politics. Von der Leyen was Germany's defence minister under Angela Merkel and a prominent CDU figure before moving to Brussels. Merz, who returned to frontline politics after a decade in the private sector, leads the same party but represents a different wing, more economically liberal, more sceptical of state intervention, and more vocal about German industrial interests. Their relationship has been correct but not warm. Merz's public broadside against "this machine in Brussels" led by his party colleague is a signal to the CDU base and to German business that he will not subordinate national economic concerns to Commission priorities.

It also creates a dilemma for von der Leyen. She cannot easily dismiss the German chancellor as a eurosceptic or a populist. He is the elected leader of the EU's largest economy and a member of her own European People's Party family. If she ignores his demands, she risks alienating the most powerful national government. If she accommodates them, she undermines her own argument that the simplification agenda is already delivering.

What overregulation means in practice

The term "overregulation" covers a multitude of grievances. For German industry, the primary complaints cluster around sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD), supply chain due diligence under the Corporate Sustainability Due Diligence Directive (CSDDD), taxonomy disclosure requirements, and the expanding scope of the Emissions Trading System. Companies argue that the cumulative compliance cost diverts management attention and capital from investment. Small and medium-sized enterprises, which form the backbone of the German Mittelstand, say they lack the administrative capacity to absorb new reporting obligations every year.

The Commission counters that these rules create a level playing field, prevent greenwashing, and align private capital with the EU's climate targets. It also points out that many requirements are phased in gradually and that the omnibus packages already propose raising thresholds so that fewer companies fall into scope. The disagreement is not about whether regulation exists, but about the pace, the cumulative effect, and the absence of a systematic sunset clause that would force the removal of outdated rules when new ones are added.

The Copenhagen test

Next week's informal meeting in Copenhagen will be the first real test of Merz's strategy. Informal summits do not produce binding conclusions, but they set the political weather for the formal European Council that follows. If Merz secures support from other leaders, particularly from the Netherlands, Austria, and the Nordic countries, which have traditionally shared Germany's concern about regulatory density, the Commission will face pressure to accelerate and deepen its simplification work. If he finds himself isolated, the "stick in the wheels" rhetoric will look like domestic theatre rather than European strategy.

The Danish presidency of the Council has not placed regulatory reduction at the top of its published priorities for the meeting, which are expected to focus on defence, Ukraine, and competitiveness in a broader sense. Merz's intervention attempts to insert a specific demand into a broader agenda. That is a classic tactic: use the informal setting to shift the Overton window before the formal negotiations begin.

The numbers behind the noise

The Commission's claim of six major simplification proposals needs scrutiny. The count includes the omnibus I package (sustainability reporting, due diligence, taxonomy), omnibus II (investment fund reporting, benchmark regulation), the SME relief package, the agricultural simplification measures, the reduction of reporting burdens for small mid-caps, and the simplification of state aid rules. Two more are promised before December. Critics note that several of these packages amend legislation that is not yet fully in force, meaning companies have already invested in compliance systems that may now change. The net reduction in obligations is disputed.

Merz has not yet published his "precise list of demands." Until he does, it is impossible to assess whether his demands are compatible with the Commission's existing programme or whether they require treaty change, which would be a different order of difficulty. The CDU/CSU business wing has called for a "one in, two out" rule for new legislation, a moratorium on new reporting requirements until 2027, and a mandatory sunset review for all regulations after five years. Whether Merz adopts those specific proposals or crafts his own will shape the negotiations in Copenhagen.

A wider European pattern

Merz is not alone. The Dutch government under Dick Schoof has commissioned an independent review of EU legislative burdens on Dutch businesses. The Austrian chancellor, Christian Stocker, has warned that the Green Deal's implementation risks deindustrialisation. The Nordic prime ministers jointly wrote to von der Leyen in June asking for a "competitiveness check" on all new proposals. What distinguishes Merz is the bluntness of the metaphor and the explicit threat to use the Council's legislative brakes. Whether that threat is credible depends on his willingness to accept the political cost of slowing down files that other leaders want, such as the defence union initiatives or the enlargement reforms.

The European Parliament, which must approve most legislation, has its own dynamics. The EPP group, the largest in the Parliament, is led by Manfred Weber, a close ally of Merz. Weber has echoed the simplification message but operates within an institution that gains influence from legislative activity. MEPs are rarely rewarded for passing fewer laws. The Parliament's committee chairs, many of them from the Greens, Socialists, and Liberals, will resist attempts to strip back reporting requirements they negotiated. Merz's fight is as much with the Parliament as with the Commission.

For now, the "stick in the wheels" is a rhetorical device. The machine continues to turn. The Copenhagen meeting will show whether Merz can turn rhetoric into a coalition, and whether the Commission's simplification packages are enough to satisfy the EU's most powerful member state. The answer will shape the legislative agenda for the remainder of this Commission term.

The Commission's simplification tracker is available on the European Commission press corner, where the six adopted packages and the two forthcoming ones are listed with adoption dates and scope.