Last I heard on this, from a JAA official at a meeting, was that some country's representative always vetoes any reduction in the IR requirements. Germany has been quoted a number of times as the culprit. And JAA (will be EASA when they take over FCL) need a consensus; it isn't a majority vote.
Various proposals have been prepared, reportedly perfectly workable, including ones for accepting FAA licenses/ratings. They just get vetoed by somebody and that's the end.
One problem is that GA is practically nonexistent outside a few EASA states. The incentive just isn't there to do anything. If private pilots were rich (to the extent of having powerful friends) then something would get done, but the rich pilots (with powerful friends) fly around in turboprops and bizjets and they usually have the full commercial licenses, so there is no pressure to improve matters on the "PPL/IR" front.
Also any proposal that for example UK AOPA is going to back needs to satisfy the requirements of the training industry.