Göppingen, Germany – German businesses are increasingly frustrated by bureaucratic hurdles that are stifling economic growth, according to reports emerging as the country’s new leadership prepares to take office. Entrepreneurs are calling for drastic reductions in red tape alongside plans to boost the flagging industrial economy.
Sascha Mohr, an engineer and entrepreneur in Göppingen, embodies this frustration. He runs an engineering firm with over 40 employees and a separate start-up, but finds himself constantly battling complex regulations and lengthy approval processes. “We are an ideas factory,” Mohr says, “but it’s hard to innovate when you’re bogged down in paperwork.”
Mohr recently encountered a setback with a project to equip a new residential area with an environmentally friendly heating system. His firm secured a contract contingent on receiving federal funding. However, the application process stretched on for months, ultimately causing the municipality to withdraw from the project due to scheduling conflicts and rising costs. “The work was just… for the trash,” Mohr lamented. The federal office responsible for processing the grant, the BAFA, stated that processing times of “several months” are not unusual given the complexity and funding volume of such projects.
The issue isn’t limited to large-scale projects. Mohr also expressed difficulty with seemingly minor administrative tasks, such as subletting a portion of his company’s building. Even a slight change in the intended use of the space – for example, converting it into a doctor’s office with a small workshop – triggers a completely new and time-consuming approval process. “It’s incomprehensible,” he said.
Starting his new venture proved particularly challenging. Mohr described the process as an “absolute hell,” citing delays in obtaining necessary permits and registrations. He contrasted this with the streamlined processes in countries like Estonia and Latvia, where online applications and quicker turnaround times are the norm. “If I think of Latvia or Estonia, I can do it online. I submit my ID or my personal ID card and that’s it,” he explained.
According to the Baden-Württemberg Finance Ministry, approximately 90 percent of bureaucratic requirements originate from federal or EU legislation, with only around 10 percent stemming from the state itself. This highlights the complexity of addressing the issue, as solutions require coordination at multiple levels of government.
The state government has introduced a “three-month approval fiction” in its building code, which stipulates that building applications are automatically approved if no response is received from authorities within three months, provided all necessary documentation is submitted. The government claims to have significantly reduced approval times for wind turbine construction, now ranking fastest in Germany with an average processing time of around seven months.
Despite the challenges, Mohr remains committed to operating his business in Baden-Württemberg, praising the region’s innovative spirit. However, he believes that reducing bureaucracy is crucial to unlocking the state’s full potential. “We need faster decisions and less red tape,” he emphasized.
The calls for bureaucratic reform come as Germany’s business leaders urge the new government, likely led by Friedrich Merz, to act quickly to rescue the stagnant economy. The recent national election saw a shift to the right, with the Christian Democratic Union/Christian Social Union (CDU/CSU) emerging as the strongest party. The need for swift action is underscored by the growing frustration among businesses and the desire for a more competitive and efficient economic environment.
