Every federal government in recent decades has wanted to combat unnecessary bureaucracy and make administration more efficient. The effect seems to be the opposite.
According to a large-scale company survey by the Ifo Institute, increasing bureaucracy is preventing new investments in Germany and driving many companies abroad. Almost 91 percent of the 1,763 participating companies complained that bureaucracy had increased since 2022, and among industrial companies the figure was as high as 95 percent. At the same time, almost 46 percent said that they had postponed planned investments in the past two years due to administrative hurdles. And almost 18 percent want to shift investments abroad in order to avoid domestic bureaucracy.
The client was the Family Business Foundation, which has been publishing the annual monitor on bureaucratic burdens every year since 2017 in cooperation with the Ifo Institute.
Supply chain law, complex approval procedures, tax law
Many of the companies surveyed complained about the supply chain law that came into force in 2023, the high level of effort involved in official approval procedures – especially in construction law – and the complicated German tax law. According to the survey, the larger the company, the stronger the tendency to flee abroad: in companies with more than 250 employees, a quarter are planning to shift investments abroad.
The biggest companies are also the ones where the anger is greatest
Anger and annoyance run extremely deep among the largest companies: 57 of the largest German family businesses with a total of 403,000 employees and over 90 billion euros in sales took part in the survey, of which 42.6 percent are considering relocating abroad. The authors led by Ifo survey director Klaus Wohlrabe rate this result as “particularly serious”, even if they point out that the value only shows a trend due to the small number of participants.
According to the survey, the dissatisfaction is directed less against the local administrations that implement the requirements of higher levels and more against the states and the federal government. Almost 43 percent rated their respective experiences with local or city administration positively, but only 7 percent were satisfied with the state and federal government.
Rustling paper forms
What many companies find particularly negative is that a large proportion of government processes still have to be carried out on paper and are not possible digitally. And where digital communication with the authorities is already possible, this often does not work, according to the survey: only 8.5 percent said that it runs smoothly.
Family businesses are demanding relief – once again
As in previous years, the Family Business Foundation as the client demanded improvements – or relief – from politicians. “These numbers make me angry,” said foundation board member Rainer Kirchdörfer. The main demands: a “practical check” for new regulations, faster procedures, expansion of digitalization and the limitation to “essential information” when fulfilling official inquiries and requirements.
Source: Stern
