As Germany grapples with slowing industrial growth, business leaders are urging the government to tackle its bureaucratic burden to revitalize the economy. Executives across key sectors, from automotive to energy, are calling for sweeping reforms to reduce the complexity and cost of red tape that many argue stifles innovation and drains valuable resources.
Ulrich Flatken, CEO of Mecanindus Vogelsang, a manufacturing company, exemplifies the frustration. He abandoned plans to automate part of his business after realizing that compliance with stringent fire safety regulations would make the investment unfeasible. “It really bothers me to keep filling out forms without believing that it will achieve anything,” Flatken told Reuters.
The sentiment is shared by many in Germany’s business community, including Christian Vietmeyer of the WSM steel association, who warned that excessive bureaucracy is holding back both growth and innovation. A recent World Economic Forum survey found that Germany is one of the few EU countries where regulatory complexity has increased in the last few years.
A key issue for businesses is the government’s regulatory framework, including cumbersome reporting requirements. Adidas CEO Bjorn Gulden criticized the company’s 245-page sustainability report, calling it a waste of time. “Bureaucracy stops business,” Gulden said in March.
The Conservative CDU party, which is set to play a major role in Germany’s new coalition government, has promised to reduce bureaucracy. It proposes annual laws to cut reporting requirements and scrap laws like the controversial supply chain law, which requires large firms to report on human rights and environmental risks in their supply chains. However, NGOs and other political factions, including the Greens, have raised concerns that relaxing these laws could erode corporate accountability and sustainability standards.
While recent government measures, such as digitalizing tax processes, are steps in the right direction, many businesses argue that more radical changes are necessary. The CDU’s manifesto calls for easing regulatory burdens on small and medium-sized enterprises, including eliminating certain inspector requirements, but skepticism remains about whether these reforms will go far enough.
As Germany seeks to modernize its industrial base, business leaders are urging a rethinking of bureaucracy—emphasizing that it should serve to support, not hinder, growth.
