The European Commission proposed on Tuesday to cut the administrative burden for companies by 25 percent by 2012 which will result in an estimated 1.5 percent increase in EU GDP.

As part of the forward looking tasks of the “Better Regulation” initiative, member states, regional and local authorities will need to inject new political momentum to their own efforts to cut red tape, said the commission. This could lead to increased investment and new jobs which will amount to €150billion ($192 million).

“We will continue to legislate to provide added value at the European level. Our aim is for a high quality European regulatory environment that responds to citizen's demands but does not place unnecessary administrative burdens on business. The initiatives announced today show the political determination of this Commission to deliver on this agenda”, said the President of the European Commission, José Manuel Barroso.

The Commission said it has conducted more than 160 “integrated impact assessments” in the past three years which have examined the social and economic impact the commission had before 2003. Now, the commission said it will be adding 43 new initiatives ranging from industrial to cosmetics regulations covering the period 2006-2009. In addition, it said it was creating an impact assessment board to review regulation

“We are moving ahead with an unprecedented drive to cut administrative burdens in Europe,” said Commission Vice President Guenter Verheugen, responsible for enterprise and industry policy. “This will make a real difference to European businessmen.”