Excessive bureaucracy costs Germany 146 bln euros per year: report

BERLIN, Nov. 14 (Xinhua) — Germany’s excessive bureaucracy costs the economy up to 146 billion euros (153.3 billion U.S. dollars) annually in lost output, according to a report by the ifo Institute for Economic Research published on Thursday.
The report highlighted the economic impact of persistent administrative barriers faced by businesses. Bureaucracy has been cited as the top issue for business in all Chamber of Industry and Commerce surveys in the past two years.
Business leaders have voiced frustration over extensive red tape, slow approval processes for new companies, and delayed digitization efforts, factors that have left Europe’s largest economy trailing behind other eurozone peers since 2018.
“The large scale of the costs caused by bureaucracy illustrates how urgently reforms are needed,” Oliver Falck, director of the Ifo Center for Industrial Organization and New Technologies, said in the report, “the costs of doing nothing are huge when measured against the untapped growth potential from reducing bureaucracy.”
The report analyzed countries that had reformed to cut red tape, tracking their economic growth to estimate what Germany may have missed by not implementing similar measures.
“If Germany were to catch up with Denmark in terms of the digitalization of public administration, its economic output would be 96 billion euros a year higher,” Falck said.
In September, Germany’s government enacted a law to cut red tape, part of a growth package featuring 49 initiatives aimed at reinvigorating economic growth.
All verification and documentation requirements, reporting obligations and statistical reports, all the constant changes to the law, data protection requirements, and lengthy administrative procedures “must be scrutinized, significantly streamlined and in some cases completely abolished in Berlin and Brussels,” said Manfred Goessl, chief executive officer of the Chamber of Industry and Commerce for Munich and Upper Bavaria, in the report. (1 euro = 1.05 U.S. dollar) ■