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Germany, France ask EU to cut bureaucracy for companies

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The German government and France want to launch an initiative to ask the EU to cut reporting obligations for companies, an effort Berlin hopes will help bring its economy back on track.

Growth projections for 2023 see Germany lagging all other major economies this year, making economic policy a chief priority for the government, which is spending Tuesday and Wednesday (29-30 August) gathered at a closed two-day ministerial retreat in Castle Meseberg.

“Germany needs impulses to strengthen the economy and growth,” a 10-point plan (see below) released on Tuesday reads. The document, adopted at the Meseberg meeting, was drafted by Chancellor Olaf Scholz (SPD/S&D) and his key ministers Robert Habeck (Greens) and Christian Lindner (FDP/Renew).

“Over the decades, a veritable thicket of bureaucracy has developed in Germany that is difficult to navigate,” the document reads. “This has become a real obstacle to investment, especially for small and medium-sized enterprises.”

Therefore, one of the key priorities was to cut red tape within Germany and at the EU level. “Procedures should be accelerated, bureaucracy reduced, and, if possible, no new bureaucracy created. In Germany, as in the European Union,” the 10-point plan argues.

Economy Minister Robert Habeck (Greens) and Justice Minister Marco Buschmann (FDP) want to launch a Franco-German push to cut reporting obligations.

“For Germany and France, it is clear: lean rules that unleash a dynamic for innovation and progress in Europe are a basic prerequisite for sustainable growth in the European Union,” Habeck’s Economy Ministry spokesperson told EURACTIV.

“We therefore jointly call on the EU Commission to draw up an ambitious action plan for acceleration and relief measures that can be implemented in the short term,” the spokesperson added.

The push for a Franco-German initiative comes as a response to statements made by French President Emmanuel Macron, who had called for a “pause” on new EU environmental rules. At the time, his call was welcomed by German Justice Minister Buschmann (FDP), while members of Habeck’s Green party have criticised the move.

The spokesperson said the German government was “in contact” with France about its proposals and that “detailed coordination will follow”. The French Economy Ministry did not respond to a request for comment by the time of publication.

Commission to present proposals in September

In March, European Commission President Ursula von der Leyen announced that the Commission will present a plan to cut EU reporting requirements for companies by 25% “by the autumn”. The plan will likely be part of a “relief package” for small- and medium-sized companies (SMEs) that the Commission will present on 12 September in Strasbourg.

A Commission spokesperson confirmed the envisaged publication date but told EURACTIV they could not give any more details on the package. The proposals are thus set to come one day ahead of von der Leyen’s last ‘State of the European Union’ address during the current mandate, which she will hold in the European Parliament’s plenary on Wednesday, 13 September.

While “welcoming” this announcement, the German Economy Ministry spokesperson said: “We call on the Commission to develop an ambitious agenda also for the coming years to accelerate investment projects for the implementation of the green and digital transformation and to relieve the burden on companies and administrations.”

In another document that is set to be adopted in Meseberg on Wednesday, seen by EURACTIV, the ministries spell out the proposals in more detail, with a particular focus on the “Mittelstand” – medium-sized companies often leading in their niche sectors, which are seen as particularly important for the German economy.

Helping the German ‘Mittelstand’

“We will ask the EU Commission to expand the EU SME definition to include an additional company category of ‘small mid-caps’ (250-500 employees) as well as to carry out a new review of the financial thresholds of the SME definition,” the plan reads.

The document reads that this should also relieve medium-sized companies from green reporting obligations under the EU’s Corporate Sustainability Reporting Directive (CSRD).

The document also calls for “the abolition of double reporting obligations” also “in the case of upcoming projects at EU the level”.

With this, the government will likely refer to the EU’s planned Corporate Sustainability Due Diligence Directive (CSD), currently under negotiations between EU institutions, which aims to make companies accountable for human rights and environmental violations across their whole value chain.

The law, which follows a similar law at the German level, came under fire from German business associations as it “may lead to a significant tightening of the existing regulation in virtually every aspect”.

“This will affect German SMEs and especially the skilled trades more and more directly,” the heads of Germany’s employer association BDA and the Confederation of Skilled Crafts wrote in a letter to Chancellor Scholz last week, adding that “politicians must recognise and respect the limits of what can actually be achieved.”

The latest push, in contrast, is seen as a glimmer of hope by the German business community.

“The Meseberg proposal for a Franco-German impulse for more bureaucracy reduction at the EU level raises the hope that the issue is now being addressed,” Freya Lemcke, EU chief lobbyist for the German Chamber of Industry and Commerce (DIHK), told EURACTIV.

“However, the economy needs action, not just announcements – and it needs it fast,” Lemcke concluded.

[Edited by Nathalie Weatherald. Th?o Bourgery-Gonse and Silvia Ellena contributed to the reporting.]

You can read the full 10-point plan (in German) below:

Impuls Wirtschaftsstandort Deutschland

Read more with EURACTIV



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