German companies are paying around €62 billion a year to cover the cost of bureaucracy and administrative demands, both from Berlin and Brussels.
According to the latest figures from the Federal Statistical Office, direct bureaucracy costs stemming from statutory information and documentation requirements stood at €62.5 billion annually in the most recent measurement period.
This marks a slight dip from the previous estimate of €66.6 billion, yet the burden remains colossal, especially for small and medium-sized enterprises that lack the armies of compliance staff enjoyed by large corporations.
Costs are driven far more by personnel than by fees, as employees are tied up for hours compiling information, preserving evidence and racing to meet deadlines.
The tally covers the hours and resources devoted to tax declarations, statistical surveys, labour and social security filings, environmental reporting, product safety documentation and a host of European Union-derived rules on everything from sustainability disclosures to data protection.
In total, German businesses grapple with more than 12,000 separate reporting obligations, many of them cascading down from directives created in the European Commission’s labyrinthine corridors.
Business lobbies such as the Federation of German Industries (BDI)) and Association of German Chambers of Commerce and Industry (DIHK)) have long warned this regulatory overload is choking competitiveness, especially at a time when the German economy is already sputtering.
Higher energy prices, sluggish global demand and now the relentless drip of new compliance demands — often amplified by Brussels’ enthusiasm for “green” and “digital” regulation — leave companies diverting money that could otherwise go to wages, research, or machinery.
German Chancellor Friedrich Merz has said the European Union has hobbled its own competitiveness through excessive regulation and bureaucracy. https://t.co/bZfAYTa9Tj
— Brussels Signal (@brusselssignal) January 22, 2026
Politicians across the spectrum have seized on the figures.
The current centre-left government has promised to reduce reporting obligations and relieve companies from bureaucracy but with little result so far.
Similar promises were made by the previous left-green coalition, to no avail.
Sahra Wagenknecht, the left-wing former co-leader of the Sahra Wagenknecht Alliance (BSW), has called for a genuine “bureaucracy shredder” rather than the cosmetic trims delivered so far.
Even within the ruling coalition, voices are growing louder in favour of meaningful relief.
Successive bureaucracy relief laws have promised simplification but critics say the results are underwhelming: Incremental digitisation here, a few waived forms there, while fresh layers of EU rules such as the Corporate Sustainability Reporting Directive (CRSD), AI Act obligations and supply-chain due diligence to name a few, keep piling up.
The €62 billion figure represents direct compliance expense alone; broader studies, such as one from the ifo Institute, put the total economic drag from excessive red tape as high as €146 billion a year when lost productivity and foregone growth or missed investments are factored in.
A survey by the ifo in 2024 showed that more than 90 per cent of the companies asked did not perceive the bureaucratic burden as reduced since 2022, on the contrary.
Ahead of the EU’s special summit on competitiveness on February 12, Germany and Italy have presented joint proposals advocating deepening the EU’s single market, shortening approval procedures for businesses and citizens and abolishing legislation that burdens the economy.
