The European Parliament dealt an unexpected blow to the EU’s flagship effort to simplify sustainability and due-diligence rules, deepening uncertainty for small businesses across Europe, especially in Greece, until MEPs vote again on the matter in mid-November.
On 22 October 2025, MEPs rejected the Parliament’s compromise position on the “Omnibus I” package, a legislative proposal designed to streamline ESG and corporate-reporting requirements. The result of 318 against, 309 in favour and 34 abstentions surprised observers, since centrist groups had previously agreed to back the deal.
The vote was held by secret ballot, at the request of the far-right Patriots group, allowing MEPs to deviate from party lines without political backlash. The defeat delays the EU’s simplification agenda and sets up a confrontation with the European Commission and EU leaders, who are urging swift deregulation to boost competitiveness.
MEPs will put the matter to a vote again on 13 November, potentially reviving the process and enabling trilogue negotiations with the Commission and Council.
What’s in the Omnibus I package
The European Commission’s “Omnibus I” initiative, published on 26 February 2025, proposed targeted amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and related legislation.
Key elements included:
- Raising CSRD thresholds so that only larger firms (potentially those with over 1 000 employees) fall under full reporting scope.
- Deferring implementation deadlines for new reporting obligations.
- Reducing value-chain data requirements.
- Creating a voluntary SME standard (VSME) to simplify disclosures for small and medium-sized enterprises.
Europe’s goal: cut compliance costs, strengthen competitiveness, and prevent SMEs from being overwhelmed by multiple sustainability frameworks.
Political fault lines
The October defeat reflects an institutional tug-of-war. While the Commission and many member-states support faster deregulation, Green, Socialist and some Liberal MEPs warn that excessive rollbacks could weaken transparency and accountability.
Commenting on the stalemate, European Parliament President Roberta Metsola said the “vote on the CSRD and CSDDD sustainability omnibus showed that for a huge section of the European Parliament, this compromise simply did not go far enough. That even with the best attempt at bridging positions, it would not have made things better, simpler, easier. For some other sections, any change would have been too much.”
If Parliament fails again to approve a position in November, negotiations may stall until 2026, potentially delaying the rollout of simplified ESG rules across the bloc.
On the other hand, the Council had already reached a common position in June 2025 endorsing scaled-back reporting for smaller firms.
Why Greece is watching closely
For Greece, where the economy is dominated by micro- and small enterprises, regulatory relief would have an outsized impact.
According to the Hellenic Statistical Authority (ELSTAT), Greece had 918,724 active enterprises in 2022, about 95 percent of them micro-firms employing fewer than 10 people.
The largest employer sectors are wholesale & retail trade (22.6 %), professional & technical services (17.3 %), and accommodation & food service (11.6 %) — industries heavily reliant on small businesses.
Meanwhile, Greece’s Athens Stock Exchange (ATHEX) counts roughly 140 listed companies, meaning only a small fraction of the economy is directly subject to CSRD. However, supply-chain pressure from banks and large buyers is already forcing Greek SMEs to provide sustainability data.
What happens next
If the Omnibus I package eventually passes, Greek SMEs could benefit from:
- Extended reporting deadlines (possibly 2028 for smaller groups).
- Reduced data requirements aligned with the new SME standard.
- Clearer guidance for suppliers providing ESG information to larger firms.
If the deadlock persists, they face continuing ambiguity and are still expected to supply ESG metrics to partners but without harmonised, simplified templates.
For now, Europe’s drive to balance competitiveness with accountability remains unresolved.
The November plenary in Strasbourg will be a test of whether Parliament can reconcile green ambitions with industry demands.
