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The reduction of bureaucracy in Germany is gaining momentum. However, small and medium-sized enterprises are seeing little relief. According to the Regulatory Control Council, one bright spot is the construction turbo.
The National Regulatory Control Council (NKR) sees a trend reversal in the so-called compliance burden – that is, the time and costs incurred by companies due to legal requirements. According to NKR Chairman Lutz Goebel, bureaucratic costs have decreased noticeably for the first time: by around 3,2 billion euros.
However, there is no reason for small and medium-sized enterprises to sound the all-clear yet. The bureaucratic burden remains very high at 64 billion euros per year . And: "13,2 billion euros in additional compliance costs since 2011 are still far too high," said Goebel.
Goebel warned the Bundestag's Committee on Digitalization and State Modernization : "This mountain of burdens must be systematically reduced." New EU-level regulations could burden SMEs with an additional 3,7 billion euros – a considerable expense, especially for companies with limited resources. These include the NIS2 directive for enhanced cybersecurity and CSR guidelines for sustainability reporting. However, both of these primarily affect larger companies.
✓ Documentation and reporting obligations (e.g. reporting employees subject to social insurance contributions)
Craft policy
Operations management
Craft policy
✓ Labelling requirements (such as the energy label for electrical appliances)
✓ Cooperation in audits (e.g. external audits or cash register inspections by the tax office)
✓ compliance with legally prescribed minimum technical standards
✓ Compliance with occupational health and animal welfare regulations
Source: Destatis
With the new Federal Ministry for Digital Affairs and Public Sector Modernization (BMDS), reducing bureaucracy is now to become a top priority. The modernization agenda developed by the BMDS under the leadership of Federal Minister for Digital Affairs Dr. Karsten Wildberger aims to simplify procedures, make laws more practical, and improve digital access to administrative services.
According to Goebel, success depends on whether all ministries cooperate – and that is not currently the case everywhere. "Some ministries are very hesitant," he criticized. The legislative process also often leaves companies too little time to implement new regulations.
A first concrete step is the federal government's so-called "construction turbo," which is intended to provide relief amounting to €2,5 billion for planning and construction projects . This is a potential ray of hope, especially for SMEs in the construction and skilled trades sectors.
In response to a question in the Bundestag committee, the NKR emphasized the importance of IT networking among the approximately 11.000 municipalities . Uniform standards and the reuse of software could simplify processes – for example, in the digitization of applications or permits.
The idea of a nationwide administrative app is not currently being planned, said Digital State Secretary Philipp Amthor (CDU). However, they are working on components that could offer real added value – such as standardized interfaces or improved digital forms.
Amthor pointed out that the modernization agenda was "the central key" to making more ambitious and stronger progress on the relief projects.
Source: hib; Destatis; Regulatory Control Council
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