Berlin pledges to cut red tape with ‘bureaucracy brake’

12303879306_a683d3f195_z.jpg [Christian Schnettelker/Flickr]

Germany’s federal cabinet has signed off on a so-called “bureaucracy brake” in an effort to cut red tape for business, something European Commission special advisor, and former Bavarian leader Edmund Stoiber, has been promoting for years. EURACTIV Germany reports.

On Wednesday (26 March), the Merkel government agreed on a set of measures to cut red tape. The plan expects to introduce an effective “bureaucracy brake” on 1 July 2015.

The initiative seeks to have every federal ministry, as they create new regulatory burdens for the economy, dismantle the same amount elsewhere. The “one in, one out” principle is to be applied here in the hopes of stopping bureaucracy from continuing to expand.

In total, the package is supposed to save the economy €744 million in bureaucratic costs per year.

The so-called bureaucracy relief act is intended to relieve more small businesses in particular of accounting and recording obligations, which are required under the commercial and tax codes.

“Our unburdening package is a powerful initiative for less bureaucracy,” explained German Economic Affairs Minister Sigmar Gabriel. “It contains many measures that will quickly and noticeably benefit citizens, entrepreneurs, the middle class and businesses in the growth phase. We especially want to remove the burden of bureaucracy and unnecessary reporting, notification and information requirements from medium-sized enterprises.”

The German economy welcomed the government’s plans. “For the first time there is a real bill to dismantle bureaucracy. One can congratulate Economic Affairs Minister Gabriel on this,” said president of the Association of German Employers, Ingo Kramer in the Rheinische Post.

“This bill could be a first step towards a moratorium on burdens, as the German economy is advocating for,” Kramer said.

Edmund Stoiber, a European Commission special advisor and former Bavarian Prime Minister, said he was pleased that now Germany has also pursued the “bureaucracy brake” proposed by his expert group.

Italy, Spain, France, Lithuania and Portugal have all already applied the “one in, one out” rule, he pointed out. The UK even wants to eliminate one old law for every new one, Stoiber commented, and is proceeding as such.

Key points outlining further relief from bureaucracy for the medium-sized economy were agreed on by Germany’s federal cabinet in December. Individual measures from the plan will be implemented in the near-term.

Other requirements from the measure’s key points are to be quickly implemented. In this way, transferring the EU’s new procurement guidelines into German law is meant to make procurement easier and more user-friendly.

In the energy sector, a new central register for the electricity and gas sectors is planned to be introduced by 2017. The database would combine, reduce and simplify reporting and information responsibilities.

Former Bavarian leader Edmund Stoiber was the EU's "Mr Red Tape", retiring after seven years of trying to reduce bureaucracy in the bloc . Before presenting his final report, he spoke of a "change of consciousness" in Brussels and called on member states to do their share to cut excessive regulation.

>>Read: Edmund Stoiber: 'I have changed the EU'

Subscribe to our newsletters