Medium-sized companies complaining about extensive reporting requirements. Corporations that relocate production abroad. German bureaucracy is increasingly becoming a disadvantage for the location.
The density of regulations in Germany has increased enormously over the past ten years. As statistics from the federal government show, both the number of federal laws and the number of individual standards rose sharply during this period. The list available to the German Press Agency shows: While there were 1,671 laws with 44,216 individual standards in effect on January 1, 2014, at the beginning of this year there were already 1,792 laws consisting of a total of 52,155 individual standards.
However, the thicket of regulations has become thicker not only at the level of the laws passed by the Bundestag, but also in the legal regulations with which the executive regulates the details. According to the federal government, as of January 1, 2014, there were 2,720 federal regulations with 38,192 individual standards. Ten years later, the 2,854 federal legal regulations in force as of January 1st consisted of 44,272 individual standards.
A spokesman for the Federal Ministry of Justice pointed out that the number of laws cannot be equated with the burden of bureaucracy. After all, you also need a law to reduce bureaucracy. Nor does every individual standard or law trigger bureaucratic costs. Nevertheless, the aim of the Federal Ministry of Justice is to counteract the further increase in the number of individual standards by “making the legislation simpler and more understandable”.
Business associations complained about too many requirements
When asked whether it is still easily possible for craftsmen, private landlords, volunteers and other people without legal training in Germany to behave in accordance with the law in every case, the legal policy spokeswoman for the SPD parliamentary group, Sonja Eichwede, admits: ” We have a fairly high level of regulation in Germany.” It is also not good if you have to hire a specialist or a lawyer for too many processes.
But the situation is not hopeless, the MP adds. Eichwede says: “We have a thicket in parts, but we also have the opportunity to change that.” At the same time, she emphasizes: “Reducing bureaucracy must not lead to the dismantling of legitimate protection interests.”
Too many bureaucratic requirements and extensive reporting requirements, along with high energy prices, have recently been cited as a burden by business associations. They welcomed the relief proposed by the federal government in 2023, which includes shorter storage requirements for tax-relevant documents and the possibility of regulating some things by email instead of a letter with a signature, but were criticized overall as not being sufficient. The bureaucracy relief law recently presented by Justice Minister Marco Buschmann is expected to be passed by the cabinet in March.
Greens are said to have a penchant for overly complex regulations
According to the one-in-one-out rule that has been in effect since 2015, for every burden imposed on the economy by law, at least the same amount of relief must be achieved by the end of the legislative period at the latest. However, since there are exceptions here – for example for effects due to EU law and for a time-limited compliance effort – the effort still increases.
For example, switching from the written form requirement to text form is not always desirable, says SPD legal politician Eichwede. For example, when terminating a residential rental agreement, an email is not sufficient. She says: “It may be different with a commercial lease, for example, because you could assume that someone is constantly checking the mailbox.”
The Greens in particular are often said to have a penchant for overly complex regulations in the service of individual justice. Driven by the desire not to ignore any case constellation, rules are sometimes created that are difficult for legal laypeople to understand.
The desire for laws that are as easy to understand as possible and that leave a certain amount of leeway is understandable, says Baden-Württemberg’s Justice Minister Marion Gentges (CDU). Unfortunately, there are two “probably fundamentally German concerns” that stand in the way of this: the great desire to have every individual case regulated as precisely as possible in the law – although “the question is whether this really represents justice”. In addition, the pursuit of the greatest possible security. “And if I can’t guarantee safety, then at least the liability of someone who has to be responsible for something not being safe at the back end.”
Breaking away from this all-inclusive mentality might not only be difficult for some citizens, but also for people who work in public administration. In any case, Gentges would be happy about a cultural change and a new management culture in the administration. The CDU politician says: “Over the decades, we have trained administrations not to make as wide use of their discretion as possible, but rather to take the path that carries the least risk.”
Buschmann wants to “leave it alone when it comes to small things”
Justice Minister Buschmann sees it similarly. Last December he said in an interview: “Many citizens and businesses are annoyed not only by what the law says, but also by the way the laws are enforced by the authorities.” We need to pick up more speed there and “perhaps we can leave it alone when it comes to small things.”
If the instruction comes from the very top, as with the approval process for the construction of liquid gas terminals, which was accelerated at the insistence of the federal government, speed is also possible in Germany as an exception, says lawyer Jan Thiele, who works in a law firm in Potsdam, among other things involved in the planning and approval of wind turbines. In everyday life, however, there is a completely different spirit in the authorities. “The courage to make a decision is missing.” The lawyer is convinced that the public administration is at risk of collapse in the long term due to the lack of personnel without a reduction in approval requirements and without simpler, more digital processes.