BERLIN, March 10 (Reuters) - German businesses are urging the country's new leadership to enact significant cuts to bureaucracy if they aim to revive the struggling industrial economy. Ten executives and business association leaders, representing various industries like automotive, energy, and shipping, emphasized in interviews with Reuters that Germany's cumbersome red tape was depleting resources that could otherwise be used for business modernization.
Ulrich Flatken, the head of Mecanindus Vogelsang, a company with 450 employees producing cylindrical fasteners, illustrates the challenges faced by businesses. Flatken had to abandon plans to automate part of his storage facility due to the high cost of meeting updated fire regulations for new equipment, making the investment unprofitable.
Despite acknowledging the need for regulatory oversight, executives are requesting the European Union to simplify its regulatory framework, especially with the U.S. market becoming more restrictive and Chinese firms expanding globally. The burden of regulations is hindering innovation in Germany's economy, as noted by Christian Vietmeyer, the head of steel and metal association WSM.
In a move towards easing regulatory burden, the European Commission has proposed reducing administrative costs significantly. German executives are wary of government promises to reduce bureaucracy, fearing additional requirements will be introduced.
While some progress has been made in alleviating bureaucracy in Germany, reports from the World Economic Forum and the Ifo economic institute indicate that compliance with government regulations has become more complex over the years, impeding business efficiency.
Adidas CEO Bjorn Gulden criticized the excessive regulatory requirements, highlighting the time-consuming nature of compliance processes. Executives like Gerd Roeders, owner of an aluminium foundry, though acknowledging the protective aspect of regulations, stress the need for a shift towards a more efficient system.
In efforts to streamline bureaucracy, Germany has implemented various laws, including digitalizing tax notices and reducing document retention periods. However, calls to relax reporting requirements pose a dilemma between corporate accountability and business efficiency.
There is a consensus among businesses for a simpler regulatory framework, as voiced by Philip Roehrig, COO of auto sector supplier ABICOR Group. He points out that the current regulatory landscape offers little value, underscoring the urgency for a more efficient and business-friendly system.