Input paper adopted for a European red tape reduction initiative

The Federal cabinet today approved an Impulspapier (PDF, 261 KB) for an initiative to reduce bureaucracy at European level. The initiative is a joint proposal by the Federal Minister of Justice, Dr Marco Buschmann, and the Federal Minister for Economic Affairs and Climate Action, Dr Robert Habeck.

Federal Minister of Justice Dr Marco Buschmann:
“The excessive bureaucratic burden that our companies are grappling with is not only created at national level; it is also exacerbated by decisions taken at European level. It therefore makes sense to also focus on the European level in addition to our national-level efforts. Our goal is to launch a European bureaucracy reduction initiative that will help to massively reduce the large piles of paper. Everything that makes Europe strong, we will keep and anything that weakens Europe we will get rid of. To do this, it is important to take stock of the current situation. We also need to identify the costs of bureaucracy at EU level. Our German Bureaucracy Cost Index could serve as a model here. However, analysing the problem is only the first step. As a second step, a solution to the problem must be sought. This is vital because the European economy needs tangible relief from the bureaucratic burden – especially small and medium-sized enterprises. Such relief would not only boost growth at zero cost for the whole of Europe, but would also increase the attractiveness and competitiveness of Europe as a business location.”

Vice Chancellor and Federal Minister for Economic Affairs and Climate Action, Dr Robert Habeck, said:
“We need to bring tangible relief in bureaucratic procedures now. Small and medium-sized companies in particular are suffering from too many requirements. Reducing unnecessary bureaucracy is therefore also a question of creating a modern state that functions well and builds trust in public institutions, and it is also important for removing barriers to investment. This is just as true for Germany as it is at European level. We need bureaucratic processes to be faster and with less red tape without sacrificing the necessary standards of protection. Together with our French partners, we therefore want to launch a joint bureaucracy reduction initiative at European level and press for a respective package of measures from the European Commission."

The input paper is intended to serve as a basis for future negotiations at European level. Additionally, the existing instruments of Better Regulation are to be applied more consistently in the future. Here, it is particularly important to consistently conduct impact assessments. The paper also suggests taking stock of the costs of bureaucracy at EU level. Similar to the German model, a bureaucracy cost index could be set up to show the development of costs over time. In addition, reporting requirements are to be reduced to a necessary minimum and, in particular, duplicate reporting requirements are to be abolished. The European Commission’s announcement that it will present proposals before the end of this year to reduce European-induced reporting obligations for companies by 25 per cent is an important step in this direction. Finally, it is important that digitisation continues to be driven forward and is always duly taken into account in legislative processes. The paper therefore suggests that new EU legislation should be consistently subjected to effective digital checks in order to improve the quality of legislation at EU level in this area as well.
The paper focuses in particular on small and medium-sized enterprises. It contains a set of measures to reduce the bureaucratic burden for them. For example, the European definition of small and medium-sized enterprises (SMEs) is to be expanded to include an additional company category of "small mid-caps" (250-500 employees), and a further review of the financial thresholds of the SME definition is to be carried out.

The Federal Government is already in contact with the French government and will now coordinate actions with it to sketch out a European bureaucracy reduction initiative. The aim here is to develop a joint approach. The input paper is to form a basis for the talks with French partners.