Arguments and Positions

Bureaucracy Reduction and Better Regulation

Arguments and Positions

An efficient shaping of regulation ensures that as little bureaucracy as possible is caused. This cuts costs for companies, increases their competitiveness and enhances the quality of Germany as an industry location.

The last German federal government had adopted working programmes for better regulation as well as the appertaining laws. The working programme 2016 was concretised with the second bureaucracy reduction act "Zweites Bürokratieentlastungsgesetz" - which entered into force as of 1 January 2017 and mainly wants to ease the burdens on very small businesses. Burden easing amounts to roughly 360 million euros annually. The concerns of small and medium-sized enterprises are taken into account by way of a simplified, standardised "SME test".

The coalition agreement of CDU, CSU and SPD includes another bureaucracy reduction act, which is being elaborated at the moment. The focus is on statistics obligations, start-ups and the one-to-one implementation of EU legislation. Furthermore, the coalition partners are planning to speak for introducing a "one-in, one-out" rule at European level. The VCI supports this plan. The current working programme "Better Regulation and Bureaucracy Reduction 2018" includes 50 bureaucracy reduction measures.

NKR examines efficiency and compliance costs

The Regulatory Control Council (Normen-kontrollrat/NKR) examines new draft regulation from the following aspects: Are the generated bureaucracy costs necessary, and has the competent ministry chosen the least costly option? Where a more efficient solution is possible, the NKR presents a relevant position.

Moreover, since 2011 the federal ministries need to list comprehensively – for new draft regulation – all the costs that follow for industry, the general public and the public administration and submit them to the NKR for position-taking.

With the extended NKR mandate – in force since 2011 – not only costs arising from information requirements but also compliance costs are examined (e.g. costs of measures to comply with standards and limit values). This is because usually the largest part of bureaucracy and regulatory costs incurred by companies falls to their share.

EU agenda on "Better Regulation"

The incoming EU Commission from end 2019 will decide on the future of the EU agenda on "Better Regulation". The package presented back in May 2015 by the incumbent First Vice-President Timmermans was a major political step towards more transparency and participation options in EU legislation. Practice shows the importance of this agenda which, however, should be expanded and improved in its implementation: The "evaluation first" principle, according to which initially the existing legislation needs to be evaluated before considering a new legislative proposal and potential political options are looked into with an impact assessment, has to be implemented consistently. Impact assessments support fact-based decisions. If they were updated based on the final legal text, they would make major reference points for later evaluations and could strenghten the responsibility of the EU institutions for the outcomes. The Regulatory Scrutiny Board (RSB), which contributes to assuring the quality of evaluations and impact assessments, should be given more competencies and strengthened with additional resources.

THE VCI IS CALLING FOR THE FOLLOWING

  • Pursue overall bureaucracy reduction
    The German federal government should set an ambitious target that also includes the compliance costs of regulation. This is the only way to really reduce bureaucracy and to noticeably ease the burdens on industry.
  • Continue to resort to industry's competence for solving problems
    It is important to reliably estimate the burdens stemming from regulation and from further provisions and to use the potential for efficiency increases. Here, companies can make valuable contributions. Therefore, bureaucracy reduction should be pursued with a further close involvement of all stakeholders.
  • Further drive forward better regulation at EU level
    The incoming EU Commission should maintain and expand the EU agenda on "Better Regulation".

For questions or suggestions, please feel free to contact us.

Contacts

Angelika Becker

E-Mail: becker@vci.de