German Businesses Embroiled in Red Tape, Draining Time & Money

“Energy manager” Markus Wingens of southern Germany’s Technotherm Heat Treatment Group created his post to entice clients concerned with sustainability and boost energy efficiency.

Ensuring Technotherm Heat Treatment Group meets energy standards is still part of the job, but there’s also a lot of paperwork and keeping up with the ever-changing legislation. Last year, four new laws and fourteen revisions to existing ones regulating energy consumption were implemented, and new requirements for data reporting and form submissions followed.

Among the most recent demonstrations against EU policies and legislation, farmers from Portugal to Poland have called for a reduced bureaucracy, often protesting at “tractor rallies.” Globally, business leaders frequently lament the stifling effects of red tape. Germany, the biggest economy in Europe, is experiencing abysmal growth of less than 0.2% this year, making the problem all the more acute. In a study released last month, the International Monetary Fund cited “too much red tape” as a critical obstacle to Germany’s economic revival.

Industry estimates place the annual time spent filling out forms to feed Germany’s 375 governmental databases at 64 million hours. The Stuttgart Chamber of Business named red tape the main concern of 175,000 members. The expectations have become intolerable, even according to Germany’s chancellor, Olaf Scholz. His administration has implemented measures to cut down on paperwork, which it says will save 3 billion euros annually for individuals and businesses.

Small and medium-sized businesses with less than 500 workers and yearly revenues below €50 million (about $54 million) are particularly burdened by the time- and energy-sucking bureaucracy. Unfortunately, many of these companies do not have legal departments on staff whose only purpose is to file audits, keep statistics, and figure out which authorities (at the federal, state, European, and local levels) are looking for specific information.