The European Union has long been regarded as the global “champion of regulation,” capable of setting mandatory standards that extend their influence far beyond the EU through the phenomenon of the “Brussels Effect.” At the same time, the emergence of the Draghi Report and subsequent initiatives of the European Commission have highlighted growing criticism of overregulation as a factor allegedly hampering innovation and the competitiveness of the European economy. These developments laid the groundwork for a new course – regulatory simplification – which has consequences not only for the EU but also for candidate countries, particularly Ukraine, which is in the process of aligning its national legislation with the EU acquis.

The aim of this article is to critically examine the phenomenon of regulatory simplification in EU law and its impact on the regulation of economic activity in Ukraine as an EU candidate state.

The article explores the content and implications of the Draghi Report and subsequent EU legislative initiatives, in particular Omnibus I, which amended the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

It demonstrates that, under the banner of regulatory simplification, requirements for corporate responsibility regarding compliance with human rights and environmental standards were effectively weakened. The scope of the study also includes EU plans to review digital legislation (the GDPR, the Data Governance Act and the Data Act, the Artificial Intelligence Act, etc.), which may lead to a lowering of fundamental user rights protection. The EU’s decision not to adopt the AI Liability Directive is also subjected to criticism.

The analysis shows that Europe’s competitiveness challenges stem primarily from structural, cultural, and institutional factors (entrepreneurship culture, corporate and insolvency law, investment practices), rather than from overregulation per se. Special attention is devoted to the Ukrainian context: the absence of developed legislation on corporate sustainability, AI, and data protection creates a risk of uncritical transposition of inconsistent European reforms.

The article argues that the logic of “less regulation – more competitiveness” is flawed. The key task is not to reduce the number of rules but to improve their quality, coherence, and ability to strike a balance between innovation, market development, and the protection of human rights and the environment. For Ukraine, it is crucial to take into account the dual context: the need to adapt its legislation to the EU acquis, while at the same time critically reflecting on new European trends in order to avoid replicating external problems and contradictions. Regulatory simplification can make sense only as an improvement of processes, but not as a departure from fundamental principles of law.

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