Germany's Bureaucratic Burden: A €146 Billion Economic Drain

Excessive bureaucracy in Germany incurs annual economic losses estimated at €146 billion. The Ifo Institute highlights that slow digitization and lengthy procedures are major obstacles, urging reforms. The government's recent legislation aims to reduce red tape but is viewed as insufficient by business associations.

Germany's economy is suffering staggering financial losses due to excessive bureaucracy, costing up to €146 billion annually, according to a study released by the Ifo Institute. This report quantifies the long-standing frustration in the business community, echoing sentiments of reform urgency.

The study highlights lengthy approval processes, slow digital transition, and overall bureaucratic red tape as critical deterrents to economic performance, placing Germany behind its euro zone counterparts since 2018. Oliver Falck, director at the Ifo Institute, underscored the significant growth potential that could be unleashed by cutting bureaucracy.

In response, the government enacted a law in September aimed at reducing administrative hurdles, as part of broader efforts to enhance growth. However, business groups argue that these measures fall short of boosting competitiveness, urging for more ambitious strategies.

(With inputs from agencies.)