German Business Is Tangled in Red Tape

Companies in Germany complain that the demands of bureaucracy are costing them time and money that would be better spent building their businesses.

By Melissa Eddy of The NY Times. Excerpts:

"Last year, four new laws and 14 amendments to existing ones governing energy use took effect, each bringing fresh demands for data to be reported and forms to be submitted — in many cases to prove the same standards that the company has already been certified as reaching since 2012, Mr. Wingens said [Markus Wingens who runs a metal heat-treatment company].

“We have the Renewable Energy Act, we have the Energy Efficiency Act, we have the Energy Financing Act, and each comes with an administrative burden,” he said. “It’s madness.”"

"In a report last month, the International Monetary Fund called “too much red tape” one of the major impediments to reviving the German economy.

For example, it takes 120 days to obtain a business license in Germany — more than double the average in other Western economies. Germany also lags behind the rest of the European Union in the digitization of government services, still requiring written forms for certain tax refunds and building permits."

"German companies spend 64 million hours every year filling out forms to feed the country’s 375 official databases, according to industry estimates. When the Stuttgart chamber of commerce asked its 175,000 members to name their biggest challenges, red tape topped the list.

Even Germany’s chancellor, Olaf Scholz, has publicly acknowledged that the demands have become too much. “We have reached a situation where, in many places, no one can carry out all of the laws that we have created,” Mr. Scholz said last month."

"The red tape drain on time and resources is felt especially by small and midsize firms — those with fewer than 500 employees and annual revenue below €50 million (about $54 million) — that are the backbone of the German economy.

These businesses often lack in-house legal departments dedicated to filing audits, recording statistics and deciphering which information is wanted by which authorities"

[at one store] "deli workers would take cold cuts that were nearing their expiration dates and use them in sandwiches for quick sale, until a regulation that required detailed lists of all ingredients in all items sold took effect. Now, instead of making new sandwiches — and lists — every day based on what is about to expire, they have a more limited sandwich offering and throw away more meat."

"At the seafood counter, fishmongers must now ensure that each variety of fish is labeled in both German and Latin. They also must take the temperature of every fish or fillet, as well as the overall temperature inside refrigerator cases, twice a day."

"To set up an online registration system for 20 school districts, his firm needed the approval of five regional data protection officers. Each had a separate interpretation of the European Union’s data security regulations; one told Mr. Wirkner [Michael Wirkner, who founded an advertising agency in Göppingen nearly two decades ago.] that he could use a Google tool, while another insisted it was not allowed." 

He noted that German regulators had imposed the European Union’s sweeping data privacy law on rules governing even professional etiquette. “In Germany, we have regulations about handing over business cards at business meetings and whether it’s still allowed,” he said. [said Andreas Kiontke, a lawyer who works with the chamber of commerce.]

Related posts:

The Soul-Sapping Grind of Doing Business in Bureaucratic Germany (2025) 

EU Aims to Cut Red Tape, Boost Funding to Lure Tech Startups: Officials want to simplify labor and tax laws so startups can launch rapidly in Europe (2025)

The Tech Industry Is Huge—and Europe’s Share of It Is Very Small: A risk-averse business culture and complex regulations have stifled innovation on the continent, weighing on its future  (2025)