Spanish Prime Minister Pedro Sánchez has taken a firm stance against the European Union's ongoing deregulation push, warning that cutting rules for the sake of competitiveness could repeat the errors that triggered the 2008 financial crisis. Speaking via videolink to an event organised by his Socialist colleagues at the European Parliament in Brussels on Tuesday, Sánchez rejected the notion that fewer laws are the answer to Europe's economic challenges.
“Some will say that to compete, you must deregulate. Those who say that are often the very same people who left the world into the financial crisis with that same regime,” Sánchez told the gathering of MEPs and party staff. “This is not about having more or fewer laws or rules. This is about having good rules and good laws.”
His remarks, which drew the loudest applause of the day, put him directly at odds with the European Commission's current strategy, which has prioritised cutting red tape to boost business competitiveness. Over the past two years, the Commission has rolled out ten so-called “omnibus” packages aimed at simplifying legislation across multiple sectors. According to Brussels, these measures have already reduced administrative costs for companies by €15 billion, with a target of €37.5 billion by 2029.
Critics, however, argue that this simplification has often come at the expense of environmental and social protections. A notable example is the 2025 package that eased corporate sustainability reporting requirements, a move that environmental groups and some member states condemned as a step backward.
A divided Europe on regulation
The deregulation drive has found strong backing from several EU capitals, particularly Berlin and Rome. German Chancellor Friedrich Merz has been especially vocal, advocating for a “one in, two out” principle, meaning that for every new EU regulation adopted, two existing ones should be abolished. The Nordic countries have also thrown their weight behind the simplification agenda.
Sánchez, by contrast, argued that Spain's own experience proves that economic growth and social equity can go hand in hand. “We are proving that we can boost economic growth while reducing inequality,” he said, adding that the country leads the green transition without sacrificing competitiveness. His comments come as Spain grapples with its own challenges, including a severe housing crisis that has seen rents consume half of many households' incomes — a topic that resonates across the continent.
The event, titled the Dialogue on a Progressive European Future, also featured contributions from Commission Vice-President Teresa Ribera, European Committee of the Regions President Kata Tüttő, and US Senator Bernie Sanders. It was part of a broader effort by the Socialists and Democrats (S&D) group to redefine their political priorities at a time when Europe appears to be shifting to the right.
Participants outlined a new policy orientation built on six pillars: affordable housing, affordable high-quality food, quality jobs, clean energy, a genuine defence union, and stricter regulation of big tech, including higher taxes and greater control. The aim, according to organisers, is to offer a clear alternative to the conservative and liberal agendas that have gained ground in recent elections across the continent.
Sánchez's intervention underscores a deepening fault line within the EU over how to balance competitiveness with social and environmental standards. While the Commission and several member states push for lighter regulation, the Spanish leader insists that the answer lies in smarter, not fewer, rules — a message that resonated strongly with his Socialist audience.
