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How more and more bureaucracy is damaging medium-sized businesses

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How more and more bureaucracy is damaging medium-sized businesses

The burden of German bureaucracy is increasingly becoming a problem. picture alliance / Caro | Corth

The density of regulations in Germany has increased significantly over the last ten years.

According to the federal government, in 2014 there were 2,720 federal regulations with 38,192 individual standards. Ten years later there were 2,854 federal legal regulations from 44,272 individual standards.

Business associations complain about the high burden of bureaucracy and are calling for the regulations to be simplified.

Medium-sized companies complain about increasing bureaucracy while large corporations relocate their production abroad. German bureaucracy is increasingly becoming a disadvantage for the location.

In the last ten years, the density of regulations in Germany has increased significantly. According to federal government statistics, both the number of federal laws and the number of individual standards increased significantly during this period. Data available to the German Press Agency shows that on January 1, 2014, 1,671 laws with 44,216 individual standards were still in force, while at the beginning of this year there were already 1,792 laws with a total of 52,155 individual standards.

The density of regulations has increased not only in the laws passed by the Bundestag, but also in the legal regulations with which the executive determines the details. According to the federal government, on 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 high number of laws does not mean overregulation

A spokesman for the Federal Ministry of Justice emphasized that the number of laws cannot be directly equated with the burden of bureaucracy, as laws also serve to reduce bureaucracy. In addition, not all individual standards or laws trigger bureaucratic costs. Nevertheless, one of the Federal Ministry of Justice’s goals is to counteract the further increase in the number of individual standards by simplifying the legislation and making it more understandable.

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When asked whether it was still possible for craftsmen, private landlords, volunteers and other people without legal training to behave in accordance with the law, the legal policy spokeswoman for the SPD parliamentary group, Sonja Eichwede, admitted that Germany has a high level of regulation. It is also undesirable to have to hire specialists or lawyers for too many processes.

Nevertheless, the situation is not hopeless, says Eichwede. She emphasized that Germany has the opportunity to simplify the regulations. At the same time, however, it must be ensured that the reduction in bureaucracy does not come at the expense of legitimate protection interests.

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Germany’s burden of bureaucracy is increasingly becoming a burden for industry

In addition to high energy prices, business associations have recently cited too many bureaucratic requirements and extensive reporting requirements as burdens. Although they consider the relief proposed by the Federal Government to be positive, such as shorter storage requirements for tax-relevant documents and the possibility of dealing with some matters by email instead of a signed letter, they were judged to be inadequate overall. The bureaucracy relief law, which was recently presented by Justice Minister Marco Buschmann, is expected to be passed by the cabinet in March.

Although the one-in-one-out rule has been in effect since 2015, according to which every burden on the economy must be offset by at least an equal amount of relief by the end of the legislative period, there are exceptions, such as effects caused by EU law and temporary ones Compliance costs. This still increases the bureaucratic effort.

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The switch from written form to text form is not desirable in all cases, explains SPD legal politician Eichwede. For example, when terminating an apartment rental agreement, an email is not sufficient. She notes: “It may be different with a commercial lease, for example, because you could assume that someone is constantly checking the mailbox.”

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Above all, the Greens are often accused of favoring overly complex regulations in the service of individual justice. Their effort not to neglect any case constellation sometimes leads to sets of rules that are difficult to understand for legal laypeople.

The desire for clearly understandable laws with a certain amount of leeway is understandable, says the Justice Minister of Baden-Württemberg, Marion Gentges (CDU). However, this is counteracted by two “probably quintessentially German concerns”: the urge to see every individual case precisely regulated in the law, which is questionable as to whether it really means justice. And 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.”

It may be difficult for some citizens and those in public administration to move away from the all-inclusive mentality. Gentges expressed the desire for a cultural change and a new management culture in the administration. The CDU politician emphasized: “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.”

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Justice Minister Buschmann also shares this view. In December last year he said in an interview: “Many citizens and companies are annoyed not only by what the law says, but also by the way the laws are enforced by the authorities.” More speed needs to be picked up and “perhaps we can leave things alone even when it comes to small things.”

If the instruction comes from above, such as the approval process for the construction of liquid gas terminals that was accelerated at the insistence of the federal government, speed is also possible in Germany, says lawyer Jan Thiele, who, among other things, deals with the planning and approval of wind turbines . In everyday life, however, a completely different spirit prevails in the authorities. “The courage to make a decision is lacking.” The lawyer is convinced that without a reduction in approval requirements and without simpler, more digital procedures, there is a long-term risk of public administration collapsing due to a lack of personnel.

AA/dpa

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