German Businesses Struggle with Increasing Bureaucracy, Call for Digital Reform

A recent study by the Institute of the German Economy (IW) reveals that 80% of companies in Germany have experienced increased bureaucratic burdens over the past three years, with over half reporting a significant rise. Businesses report inefficiencies such as slow administrative procedures, with roughly 70% deeming them too slow, and about half criticizing the lack of expertise and capacity in processing applications.

The survey, conducted in autumn 2025 among over 1,000 participants, underscores widespread calls for reform. More than 90% of companies advocate for simpler EU regulations, while nearly 75% see potential relief in a centrally organized digital administration. Furthermore, over 60% suggest reducing liability risks for administrative staff to speed up processes. Klaus-Heiner Röhl, an IW bureaucracy expert, highlights the need to trust businesses more and give administrative staff greater discretion, emphasizing that improved coordination of conflicting laws and streamlined regulations would significantly benefit the economy.

Despite the urgency for reform, experts acknowledge the complexity of overhauling Germany's bureaucratic system. Since 2010, the number of individual rules in federal laws has risen by more than 20%, reaching nearly 100,000. Germany’s bureaucracy, traditionally a competitive advantage offering legal and planning security, now faces challenges due to excessive and sometimes contradictory regulations. Former Federal President Horst Köhler previously warned of unchecked proliferation of norms turning harmful.

The dilemma remains that while bureaucracy is necessary to protect consumers, workers, and the environment, excessive regulation causes costs and drains resources, posing risks to Germany’s renowned business environment and innovation. Calls for careful reform rather than radical 'chainsaw' cuts underline the need for a balanced approach.