Typically German because we need a bureaucracy relief law? The current status of the economy and renewable energies such as PV

🏛️📜 The Bureaucracy Relief Act IV (BEG IV) is a legal initiative of the German federal government that was passed by the Bundestag on September 26, 2024. The aim of the law is to relieve the German economy of around 944 million euros annually by reducing bureaucratic hurdles.

🌟 Main objectives and measures of the Bureaucracy Relief Act IV

Shortening of retention periods

The retention period for tax documents is reduced from ten to eight years.

Digitization of administration

Tax assessments and other administrative files should be made available digitally in the future. The previously required consent of the recipient is no longer required in favor of an objection solution.

Facilitations in labor law

The formal requirements in the labor law verification law are being relaxed to make it easier for companies to digitize their human resources management processes. This includes, among other things, the possibility of concluding employment contracts digitally.

Abolition of the hotel reporting requirement

German citizens no longer have to fill out a registration form when staying in a hotel.

Facilitations in stock corporation law

Companies can publish documents about compensation-related decisions on their website without the need for a separate announcement.

🚫 Criticism

Despite the positive aspects, BEG IV is viewed by some as inadequate. Critics complain that the law does not go far enough to achieve the comprehensive reduction in bureaucracy that would be necessary to provide significant economic relief. Of the over 400 proposals from business, only a few were incorporated into the law. In addition, Germany lags behind in digitalization compared to other European countries, which makes further efforts necessary.

The adoption of BEG IV is a step towards reducing bureaucracy, but it is seen as a small step as many challenges remain. Further measures and laws to reduce bureaucracy are planned or are being examined.

➡️ IW – Institute of German Economy – New Bureaucracy Relief Act: Just a small step

➡️ BDEW – Federal Association of the Energy and Water Industry is calling for its own bureaucracy relief law for the energy industry

📜💼📉 The new bureaucracy relief law: A small step forward with big challenges

After long negotiations, the federal government passed the fourth Bureaucracy Relief Act (BEG IV). The aim of this law is to relieve the German economy of almost one billion euros in bureaucratic costs every year. But although this is an important step, it remains far from heralding a comprehensive turnaround for the German economy.

📋🛑 The bureaucracy problem in Germany

For years, Germany has been struggling with a massive bureaucracy problem that puts a strain on companies and citizens alike. The approval of construction projects often takes months, sometimes even years, and companies have to submit the same information to different authorities over and over again - often in paper form. Even when moving, citizens still have to present themselves to the authorities in person. These cumbersome processes not only cost time and nerves, but also significant financial resources. The result: Germany as a business location becomes unnecessarily expensive and bureaucratic hurdles reduce international competitiveness.

A current example is the planning and approval procedures in the construction industry. While construction projects are quickly approved digitally in other European countries such as the Netherlands or Denmark, many processes in Germany are still characterized by inefficient analogue structures. This leads to delays that not only harm developers, but also hinder the modernization and expansion of important infrastructure such as roads, railways and broadband networks.

🛤️📈 First steps in the right direction

German politicians have now recognized the problem. Federal Justice Minister Marco Buschmann praises the new Bureaucracy Relief Act IV as a “free economic stimulus package” and a decisive contribution to stimulating the economy. But the reality looks different. Despite some progress, especially in the digitalization of administrative processes, the measures adopted are only small steps.

Of the over 400 proposals from business aimed at reducing bureaucracy, just eleven made it into law. This makes it clear that the implementation of many necessary reforms is still progressing slowly. Many of these proposals came from companies that are burdened by unnecessary bureaucracy, particularly in the areas of tax law, labor law and environmental protection.

📄⏳ Shortened retention periods as an example

One of the few “major” measures in the new law concerns the shortening of the retention periods for tax documents from ten to eight years. This change will provide noticeable relief, especially for small and medium-sized companies. The previously long deadlines often led to unnecessary costs for archiving documents, without this having any discernible benefit for companies or tax offices in practice.

The possibility of concluding or terminating employment and rental contracts digitally in the future is also a useful innovation. These steps are particularly timely in times of home offices and increasing digitalization of workplaces. Nevertheless, key concerns such as the fully digital foundation of companies remain unfulfilled. While this has long been standard practice in countries like Austria and Denmark, in Germany the vague goal of “striving for” this remains.

The slow implementation of the Online Access Act (OZG) is another example of Germany's digital backwardness. Essential administrative services should actually be available online by the end of 2022. However, the current status shows that only 156 services are being offered digitally - only 51 more than at the end of 2022. The fact that these measures now fall under the Bureaucracy Relief Act IV could be understood as a "label fraud", as in reality it is just a delay overdue reforms.

🪡🧩 Red tape relief as a patchwork?

Although the new Bureaucracy Relief Act exceeds the scope of the first two laws (BEG I and II), it still falls short of expectations, especially in comparison to the third Bureaucracy Relief Act of 2020, which enabled savings of 1.2 billion euros in bureaucracy costs. At the same time, companies are faced with new bureaucratic challenges, such as the EU Supply Chain Act and the Taxonomy Regulation for the banking sector. Both regulations require extensive reports and obligations to provide evidence, which, however, are not recorded in the German bureaucracy measurement.

Another problem lies in the complicated state laws and the often cumbersome planning and approval procedures at the local level. These cause significant delays and complicate not only construction projects, but also other economically important projects. The economic expert Klaus-Heiner Röhl from the German Economic Institute (IW) puts it aptly: “The great liberation against the paralyzing bureaucracy is still pending.” As long as it is not possible to fundamentally reform the bureaucratic structures and consistently push forward the dismantling of obstacles , the relief for the economy is stuck halfway.

🔄🔧 The path to a real trend reversal

In order to achieve a real turnaround for the German economy, much more comprehensive reforms are needed. This includes, above all, the consistent digitalization of administrative processes and a simplification of bureaucratic requirements for companies. Countries like Estonia and Finland show that efficient and modern administration is certainly possible. In Estonia, for example, 99 percent of all government services are available online, saving citizens and businesses significant time and costs. In Finland, too, the bureaucracy has been simplified to such an extent that new companies can be set up within a few days.

German policymakers should use these countries as role models and initiate ambitious reforms that not only provide selective relief, but also bring about structural improvements. An important starting point is the comprehensive digitalization of public administration. This not only means that forms are made available online, but that all administrative processes from application to approval are handled digitally. However, this requires significant investments in the IT infrastructure as well as close cooperation between the federal, state and local governments.

🌈⏫ Still a lot of room for improvement

The fourth bureaucracy relief law is a small step in the right direction, but it is far from enough to provide lasting relief for the German economy. While some measures such as shortening retention periods and the possibility of concluding contracts digitally are sensible and important, the law falls short of expectations in many areas. Germany continues to lag behind, especially when it comes to the digitalization of administration.

To ensure that Germany does not lose further ground in international competition, more far-reaching reforms are necessary. Politicians are called upon not just to take small steps, but to develop a comprehensive reform agenda that will sustainably reduce bureaucracy and strengthen the competitiveness of the German economy. This is the only way to make Germany fit for the future and maintain it as an attractive business location.

🌟🚀⚡ The Federal Association of the Energy and Water Industry (BDEW) is calling for its own bureaucracy relief law for the energy industry

The Federal Association of the Energy and Water Industry (BDEW) recently strongly called for its own law to reduce bureaucracy for the energy industry. The reason for this is the Bureaucracy Relief Act IV passed in the Bundestag, which has met with criticism in the energy industry. In this context, Kerstin Andreae, chairwoman of the BDEW general management, expressed dissatisfaction with the scope of the measures decided upon. From the industry's perspective, this law would have offered a far-reaching opportunity to significantly advance the energy transition through significant relief. Unfortunately, the law is “far too short” and does not sufficiently take many of the energy industry’s suggestions into account. The disappointment is great because companies in the sector are working hard to secure energy supplies and at the same time accelerate the transition to a sustainable energy future.

🌟🛠️ The special challenge of the energy industry

The energy industry is facing immense challenges. In addition to securing energy supplies, the transition to renewable energies is one of the most urgent tasks of our time. Companies in the sector are not only confronted with technical and economic difficulties, but also with a particularly high bureaucratic burden. These hurdles slow down innovation and slow down the processes that actually need to be accelerated in order to achieve the ambitious goals of the energy transition.

According to the BDEW, the Energy Industry Act alone includes 135 separate reporting requirements. This multitude of obligations illustrates how complex the regulatory environment is in which companies have to operate. And that's just one of over 15,000 laws and standards that are relevant to the industry. The BDEW sees an urgent need for action here, because the current bureaucracy is hindering the necessary transformation.

In recent years, the energy industry has developed numerous practical proposals and made them available to politicians. These proposals aim to simplify processes, avoid double reporting and eliminate unnecessary reporting requirements. However, many of these suggestions were not taken into account in the adopted Bureaucracy Relief Act IV. The lack of clear statements on the implementation of these proposals is incomprehensible to the industry and is causing frustration.

🌟📜 Need for a specific bureaucracy relief law for the energy industry

While the Bureaucracy Relief Act IV is aimed across all sectors, the BDEW emphasizes that a general law does not meet the specific requirements of the energy industry. Due to its complexity and high pressure to transform, the energy industry is one of the sectors that particularly suffers from the existing bureaucracy. It is therefore necessary to develop a specific law to reduce bureaucracy for the energy industry.

Such a law would have to start exactly where the pressure to act is greatest: it is important to sift through and dismantle the thicket of reporting obligations and requirements. This is the only way to create real relief that gives companies in the energy industry the leeway they need to concentrate on the energy transition. “We need our own initiative,” demands Kerstin Andreae, “that brings together the various approaches in order to create effective relief.”

🌟💻 A central IT platform to simplify processes

In addition to its own bureaucracy relief law for the energy industry, the BDEW is calling for the introduction of a central IT platform. Such a platform could coordinate the fulfillment of the numerous information and reporting obligations and significantly streamline the processes. The introduction of a central platform would enable companies to fulfill their reporting obligations more efficiently, freeing up valuable resources for the actual work on the energy transition.

Digitalization is a key factor in reducing bureaucratic effort. An IT platform that brings together all relevant reporting processes could make significant progress towards reducing bureaucracy. It would not only relieve the burden on companies, but also make the work of government agencies easier by optimizing access to the required data.

🌟🏃‍♂️ Reducing bureaucracy as a long-distance run

The BDEW emphasizes that reducing bureaucracy is not a sprint, but a long-distance run. It is a continuous process that requires perseverance and determination. As part of the growth initiative, the federal government plans to update the bureaucracy relief law annually. The BDEW expressly welcomes this, as long-term relief can only be achieved through regular reviews and adjustments to the existing regulations.

The energy industry has high hopes for this ongoing review, but also expects that the specific needs of the industry will be addressed in the coming years. It is crucial for companies that the reduction in bureaucracy does not stop halfway, but is pursued consistently. Without significantly simplifying the bureaucratic procedures, it will hardly be possible to achieve the Federal Government's ambitious climate goals.

🌟🌍 Significance of the energy transition for the future of Germany

The energy transition is one of the central projects of German politics. It aims to convert the country's energy supply to renewable energy while drastically reducing greenhouse gas emissions. The success of the energy transition is crucial for Germany's future as an industrial location and for achieving international climate protection goals.

The energy industry plays a key role in this. Without their innovative strength and their investments in new technologies, it will not be possible to successfully implement the energy transition. However, the companies in the industry depend on framework conditions that enable them to cope with this task efficiently. Excessive bureaucracy is counterproductive.

It is therefore very important that politicians take the concerns of the energy industry seriously and design the framework conditions in such a way that companies can concentrate on their core tasks: securing energy supplies and the transformation towards renewable energies.

🌟🔑 Reducing bureaucracy as a key factor for the success of the energy transition

The BDEW is not only calling for a general law to reduce bureaucracy, but also a specific law for the energy industry. This law is intended to provide real relief for companies in the industry and simplify processes so that the energy transition can progress quickly. A central IT platform could help coordinate the fulfillment of reporting obligations and further reduce bureaucratic hurdles.

Only by resolutely dismantling the existing bureaucracy will it be possible to achieve the climate goals and put the energy industry on a sustainable path. Reducing bureaucracy is a continuous process that requires perseverance and determination. But time is of the essence: in order to successfully implement the energy transition, the right course must be set now.

☑️ Industry expert, here with his own Xpert.Digital industry hub with over 2,500 specialist articles

Konrad Wolfenstein

I would be happy to serve as your personal advisor.

You can contact me by filling out the contact form below or simply call me on +49 89 89 674 804 (Munich) .

I'm looking forward to our joint project.

Xpert.Digital is a hub for industry with a focus on digitalization, mechanical engineering, logistics/intralogistics and photovoltaics.

With our 360° business development solution, we support well-known companies from new business to after sales.

Market intelligence, smarketing, marketing automation, content development, PR, mail campaigns, personalized social media and lead nurturing are part of our digital tools.

You can find out more at: www.xpert.digital - www.xpert.solar - www.xpert.plus