IN AN ATTEMPT to boost economic growth and free business from the stranglehold of red tape, the European Commission plans to reform competition rules and procedures.

Neelie Kroes, the EU Competition Commissioner, has called for unnecessary administrative hurdles to be avoided.

She also wants the control system made simpler and more transparent.

In an internal working paper she also calls for rules on state aid to certain sectors to be made more flexible. But yesterday, the Commission denied that it wanted to water down state aid rules. Jonathan Todd, the Commission’s competition policy spokesman, said: “There is no way Mrs Kroes would want to relax state aid rules.”

Mrs Kroes, who took up her post last month, is bringing to Brussels a wealth of business experience after a decade sitting on various boards in her native Netherlands.

She has already indicated that she believes there is scope to fine tune the EU’s competition rules to make them more responsive to market failures, which harm the cohesion of the EU and society as a whole.

“Imaginative solutions here could help deliver the results we all want to see in terms of innovation, balanced regional development and more research,” she has told Euro MPs.

In particular, she said she would be working to remove obstacles to competition in recently liberalised sectors such as telecoms, postal services, energy and transport.

Mrs Kroes is one of six European commissioners, including Peter Mandelson, who are developing ways of boosting the competitiveness of companies on the continent.

These include better co-operation between commission departments when drafting legislation, comprehensive assessments on the impact legislative initiatives will have on business, and a stronger commitment to better regulation in general.

Their work will be a key ingredient of the top policy priority of the current European Commission: to stimulate economic growth and job creation as part of the longer-term goal of making the EU the most competitive economy by the end of the decade.

That ambitious target was set at the Lisbon European summit almost five years ago. In March, EU leaders will have to decide how to kick-start the process of innovation and economic reform which is badly behind schedule.

The British Government will bring its own contribution to the fight against red tape on businesses when it takes over the revolving EU presidency in July. It has made regulatory reform one of the main themes of its six-month stint in the EU chair.

GERMAN GLOOM

There is more gloom for the German economy after its retail association said that high street sales would be worse than expected. Before Christmas it had forecast a fall in sales of 0.5 per cent for the year; it now believes sales will be as much as 1 per cent lower.

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