Council of the EU | Simplification: Council agrees positions on digitalisation and common specifications, as well as on small mid-caps, to boost EU competitiveness

Member states’ representatives (Coreper) approved today the Council’s positions on several Commission proposals which form part of the so-called ‘Omnibus IV’ legislative package and contain two main elements:

• two proposals (directive and regulation) on digitalisation and common specifications aiming to digitalise existing physical requirements by implementing the ‘digital by default’ principle and introduce a procedure for the Commission to draw up common specifications in a number of legal acts, and
• two proposals (directive and regulation) aiming to extend certain mitigation and support measures available for small and medium enterprises (SMEs) to companies that have outgrown the SME definition, the so-called small mid-cap enterprises (SMCs)

“Too many European companies spend too much time navigating complex rules. With today’s agreement, we take an important step to change that. Whether it’s simplifying digital documentation or helping small businesses grow, this is about building a more competitive Europe. There is more work ahead – but these agreements show that simplification is no longer just a promise, it’s now a practice.”

Marie Bjerre, Minister for European affairs of Denmark

“With this agreement, we are showing the way towards a more digital Europe with fewer burdens for our businesses. This is absolutely crucial for Europe’s future in a world where countries like the USA and China are pulling ahead. By harnessing the potential of technology, we can remove very concrete burdens for our companies. At the same time, we are showing flexibility towards businesses that have grown large but should become even larger and create the solutions of the future here in Europe.”

Morten Bødskov, Minister for Industry, Business and Financial Affairs

Objectives of the proposals

On digitalisation and common specifications, the proposals aim to amend 20 pieces of EU product legislation under single market rules on digitalisation and common specifications.

They follow up on a broader strategy to prioritise digital formats with the aim of eliminating paper-based requirements in product legislation. In particular, the proposal foresees the digitalisation of the EU declaration of conformity, as well as the exchanges between competent national authorities and economic operators.

The proposal additionally gives the possibility for manufacturers to provide instructions for use to users in digital format instead of paper. Furthermore, the proposal introduces alternative solutions to prove the compliance of a product with EU rules via ‘a common specification’ in situations where harmonised standards are not available. This will offer more legal certainty, reduce costs, and increase competitiveness.

On small mid-cap enterprises, the main objective is to extend certain mitigation and supporting measures available for SMEs to companies that have outgrown the SME definition. These companies are considered to play a vital role in the EU economy, providing 6% of overall employment and are prominently present in key EU competitiveness sectors, such as electronics, aerospace and defence, energy, energy-intensive industries and health. Defining a new category of small mid-cap companies should help to:

• avoid a cliff-edge and enable smooth transition of SMEs into SMCs
• allow SMCs to keep the same beneficial environment as when they were SMEs
• give better incentives to SMEs to scale up

Main elements of the Council’s amendments

On SMCs, the original Commission proposal identifies this new category of companies as enterprises with fewer than 750 employees and either up to €150 million in turnover or up to €129 million in annual balance sheet total. In its mandate, the Council raised these thresholds to enterprises with fewer than 1000 employees and either an annual turnover of up to €200 million or up to €172 million in annual balance sheet total.

On digitalisation and common specifications, the Council has broadly retained the thrust of the Commission proposals, while amending several technical elements specific to the respective legislative acts.

The Council has also introduced further clarifications regarding the access to digitally available information and to a company’s ‘digital contact’. The text also ensures that, in cases where there is a risk of serious harm to consumers, safety information is always available in paper form.

The Council aligned the texts on common specifications with the approach agreed in the ‘Toy Safety’ regulation (Article 14) earlier this year. The text clarifies that the common specifications should only serve as a fallback option when harmonised standards are not available or insufficient, hence promoting coherence across the EU acquis.

Finally, the Council has extended the transposition deadlines of the directive to 24 months to give member states sufficient time to implement the amendments.

Next steps

Following today’s approval of the Council’s negotiating mandates by Coreper, the presidency will start negotiation with the European Parliament as soon as possible to reach a final agreement.

Background

In October 2024, the European Council called on all EU institutions, member states and stakeholders, as a matter of priority, to take work forward, notably in response to the challenges identified in the reports by Enrico Letta (‘Much more than a market’) and Mario Draghi (‘The future of European competitiveness’).  The Budapest declaration of 8 November 2024 subsequently called for ‘launching a simplification revolution’, by ensuring a clear, simple and smart regulatory framework for businesses and drastically reducing administrative, regulatory and reporting burdens, in particular for SMEs. Between 26 February and 9 July 2025, as a follow-up to EU leaders’ call, the Commission put forward six ‘Omnibus’ packages, aiming to simplify existing legislation on sustainability, investment, agriculture, small mid-caps enterprises, digitalisation and common specifications, defence readiness and chemical products.

On 21 May 2025, the Commission adopted its fourth Omnibus package. The package contains a proposal for a directive and for a regulation on mid-caps, a proposal for a directive and a regulation as regards the digitalisation and alignment of common specifications amending 20 pieces of EU product legislation under single market rules, as well as an amendment of the regulation on batteries regarding the due diligence requirements. The regulation and directive on mid-caps amend a total of 8 existing pieces of legislation: the general data protection regulation (GDPR), the anti-dumping regulation, the anti-subsidies regulation, the prospectus regulation, the batteries regulation, the F-gases regulation, the markets in financial instruments directive (MiFID) and the critical entities resilience directive.

Compliments of the Council of the European Union