Bureaucracy Reduction: CDU Politician Carsten Brodesser Calls for Relief

Germany is facing one of the greatest economic policy challenges of the past decades. After years of weak growth, high inflation, rising energy prices, and growing international competition, Europe’s largest economy is struggling to maintain its competitiveness. At the same time, geopolitical crises, new trade conflicts, and technological change are fundamentally altering the conditions businesses operate under.

While the federal government aims to launch an economic restart with an extensive reform program, many businesses are demanding above all one thing: more planning certainty, less bureaucracy, and better investment conditions.

Export-oriented sectors in particular — from mechanical engineering to the chemical and pharmaceutical industry to the tobacco industry — are watching political decisions with great attention. Despite its heavy regulation, the tobacco industry in particular continues to be one of Germany’s significant industrial sectors. It invests in modern production facilities, employs thousands of workers, and makes substantial tax payments every year. For internationally active companies, stable political conditions and reliable regulation are therefore just as important as competitive energy prices and functioning supply chains.

In conversation with The Transatlantic Ledger, CDU Bundestag member Carsten Brodesser explains what reforms Germany needs now, why bureaucracy and high levies are weakening the country as a business location, and why Europe must once again place greater emphasis on economic strength and innovation in international competition. The answers are based on the statements submitted by Mr. Brodesser.

Labor Costs Too High

Mr. Brodesser, the federal government has announced its intention to sustainably strengthen Germany’s competitiveness. Which measures should now take top priority?

Carsten Brodesser: In my conviction, Germany must first reduce its structural competitive disadvantages. These include, in particular, the high tax and levy burden as well as the extensive bureaucratic requirements that businesses are confronted with on a daily basis.

The cost of labor in Germany has simply become too high — not only by international comparison, but increasingly also in competition within Europe. At the same time, many companies spend a considerable amount of their time on documentation and reporting obligations, the actual benefit of which is often minimal.

That is why we must consistently push forward with reducing bureaucracy. Business owners should once again be able to invest their time in innovation, investment, and growth — not in an ever-growing pile of forms. The reforms initiated by the federal government can make an important contribution here. The goal must be to secure prosperity while at the same time creating reliable conditions for private investment.

Germany’s economy continues to find itself in a difficult phase. Which reforms do you consider necessary to enable stronger growth again?

In truth, numerous reforms should have already been implemented years ago. Much was postponed for a long time, even though the need for economic action was obvious.

In my view, the program for growth and employment adopted this week sets the right priorities. Now, however, it is essential to implement these measures swiftly. The relief of businesses must be at the center of this effort. Because only economically strong companies create new jobs, invest in research and development, and secure our prosperity in the long term.

Many businesses complain about high bureaucracy costs. What concrete steps should be implemented in the short term?

Important measures have already been announced in this area. I particularly welcome the planned Reporting Relief Act. In the future, statutory reporting obligations are generally to be eliminated unless their necessity can be explicitly justified. This represents a genuine shift in perspective: going forward, it will no longer be up to businesses to justify every single documentation requirement — instead, the state will have to explain why it is necessary in the first place.

It is equally important to reduce the multitude of mandatory in-house compliance officers to the minimum required by European law. All of this represents important steps. Nevertheless, we must not stop here. Reducing bureaucracy is not a one-time project, but a permanent political task.

“Small and Medium-Sized Businesses and Industry Need Competitiveness Again”

Small and medium-sized businesses (the Mittelstand) are considered the backbone of the German economy. Where do you currently see the greatest need for political action?

Our small and medium-sized businesses need, above all, better economic conditions. This includes lower corporate taxes, declining non-wage labor costs, and internationally competitive energy prices. At the same time, we must consistently reduce bureaucratic burdens.

An important step was already the significant easing of the Supply Chain Due Diligence Act. Small and medium-sized enterprises in particular often lack the personnel capacity to permanently fulfill extensive documentation obligations. The resources freed up as a result should instead be available for investment in innovation, digitalization, and new business models.

Such an economic policy benefits not only traditional Mittelstand companies, but all manufacturing industries — from the chemical and pharmaceutical industry to mechanical engineering to the tobacco industry. These export-oriented sectors in particular are exposed to intense international competition and require reliable political conditions, competitive production costs, and planning certainty for long-term investments.

Germany remains a significant production location for international tobacco companies. Substantial investments in modern manufacturing, research into potentially risk-reduced products, and considerable tax contributions show that this industry continues to be an important part of Germany’s economic value creation. In my view, this makes it all the more important to have regulation that pursues public health goals while not losing sight of economic competitiveness and investment security.

“Climate Protection and Competitiveness Must Not Be a Contradiction”

Germany is pursuing ambitious climate targets. At the same time, many industrial companies are warning of rising costs and a loss of competitiveness. How can both succeed?

For me, there is no question that we must combat climate change decisively. At the same time, we must not disregard economic reality. Climate protection will only be successful in the long term if business, politics, and society work together on solutions. That is why I place little value on a policy that relies exclusively on bans or an ever-growing body of regulation. Businesses need planning certainty and realistic targets. Climate neutrality must be ambitious, while at the same time remaining economically achievable.

Industry in particular needs investment security over many years. Companies invest billions in new production facilities, modern technologies, and climate-friendly processes. Such decisions can only be made if the political conditions are reliable over the long term. This applies to mechanical engineering just as much as to the automotive industry, the chemical and pharmaceutical industry, or other energy-intensive sectors. The tobacco industry, too, continuously invests in modern production processes and new product development. Anyone who expects a sustainable transformation must, at the same time, create the economic conditions that allow businesses to actually afford these investments.

What importance do you attach to innovation and future technologies for Germany as a business location over the next ten years?

I consider this question to be crucial. For decades, Germany was known worldwide for its engineering excellence, its research, and its capacity for innovation. We can be proud of that. At the same time, we must not rest on past successes. Today, we are experiencing a global technological turning point. Artificial intelligence, semiconductor technologies, digitalization, modern production methods, and new forms of energy are transforming entire industries. If Germany fails to keep pace here, we will lose our competitiveness in the long run. That is why it is no longer enough to simply conduct good research. We must once again produce more innovation in Germany, bring it to market readiness, and secure industrial value creation within our own country.

Particularly in the field of artificial intelligence, we are currently seeing that American companies are largely setting the technological pace. Europe does have excellent science and innovative companies, yet we need to become significantly faster. That is why I explicitly welcome the fact that future technologies are to receive stronger support from the federal government. This concerns not only AI, but equally the automotive sector, mechanical engineering, clean technologies, the circular economy, battery and semiconductor production, as well as the chemical and pharmaceutical industry. Germany should once again stand for technological excellence — with the ambition not only to develop innovations, but also to successfully produce them here at home.

Technology Openness Instead of Ideological Mandates

Many businesses wish for more technology-neutral political decisions. Do you share this assessment?

Yes, absolutely. Technology today evolves faster than political processes. That is why politics should not favor or exclude individual technologies, but instead define goals and enable innovation. Particularly in times of profound technological change, it would be a mistake to politically constrain developments in advance. We must remain open to new solutions and give businesses the freedom to develop different technologies. This is the only way we can remain internationally competitive.

Germany is coming under increasing pressure in international competition. Which locational advantages need to be deliberately expanded going forward?

Our geographic location in Europe remains an important advantage. We also continue to have excellently trained skilled workers and a strong industrial base. However, these traditional strengths alone are no longer sufficient today. We need considerably more speed in digitalization. The nationwide expansion of fiber-optic networks, modern digital administrative structures, and fully digitalized approval procedures are today among the most important locational factors of all.

Equally important remains a high-performing transport infrastructure. Roads, railways, bridges, and ports form the backbone of an export-oriented economy. Another decisive factor is the shortage of skilled workers. Germany needs qualified immigration and faster recognition procedures for foreign professional qualifications. At the same time, we must continue to strengthen our education system — particularly in the STEM subjects. Beyond that, I would like to see closer cooperation between universities, research institutions, and industry. Innovation arises where science and business work together on solutions.

For internationally active companies in particular, access to venture capital is also a key competitive factor. Many innovative start-ups still leave Europe during their growth phase because they find better financing conditions elsewhere. If we tackle these challenges decisively, Germany can continue to assert its role as a leading location for industry and innovation.

“Companies Invest Where Politics Is Reliable”

What role does reliable tax and fiscal policy play in the investment decisions of international companies?

Reliable tax and fiscal policy is one of the most important prerequisites for investment decisions. International companies often plan their investments over periods of ten, fifteen, or even twenty years. Anyone who builds production facilities, develops new technologies, or launches long-term research projects needs the assurance that political conditions will not continuously undergo fundamental change. This includes stable corporate taxes, reliable depreciation rules, and sound fiscal policy. Only when companies can realistically calculate the economic conditions do investments, new jobs, and long-term growth arise.

Despite all the current challenges, Germany continues to have enormous locational advantages. However, we must not jeopardize these through political uncertainty or constantly changing regulatory requirements. Internationally active industrial companies in particular are watching very closely how the economic policy conditions develop. This applies to mechanical engineering just as much as to the chemical, pharmaceutical, or tobacco industry, whose investment decisions are often made on a Europe-wide or even global basis.

Many companies now criticize the lack of predictability in political decisions less than they criticize individual laws themselves. Do you share this assessment?

Yes. Companies can, in principle, adapt to new legal frameworks. It becomes more difficult, however, when rules are constantly changed or tightened at short notice. Planning certainty today is almost as important as the level of taxes or energy costs. Investments arise where companies have confidence in the political conditions. That is why regulation should be comprehensible, designed for the long term, and coordinated at the European level wherever possible. National special paths often lead to competitive disadvantages, without automatically producing better outcomes.

Export-oriented sectors in particular require a stable regulatory environment. This applies, for example, to the tobacco industry as well. It has been one of the most heavily regulated industries in Europe for decades. Nevertheless, companies continue to invest continuously in modern production facilities, alternative products, and new manufacturing technologies. These investments, however, require that regulatory changes remain predictable and that companies are given sufficient time to adapt to new requirements. Competitiveness and public health goals must therefore not be played off against one another. Both must be responsibly reconciled with one another.

The United States Remains Germany’s Most Important Economic Partner

How do you assess the current transatlantic economic relations between Germany, the European Union, and the United States

The United States remains one of the most important economic partners for Germany and Europe. Nothing has changed in that regard. At the same time, we are currently experiencing a phase of considerable uncertainty. American tariff policy, along with frequently short-term political decisions, is making long-term planning more difficult for many businesses. Export-oriented economies like Germany, however, depend on reliability. Companies need stable conditions in order to plan investments and organize international supply chains efficiently. That is why I hope that transatlantic relations will once again be more strongly characterized by mutual trust, economic partnership, and predictability.

Where do you see the greatest opportunities for more intensive economic cooperation between Europe and the United States?

The potential remains enormous. Europe and the United States share common values, have highly developed economies, and are among the world’s most important centers of innovation.

That is precisely why I am convinced that both sides would benefit from closer economic cooperation. A modern free trade agreement could remove numerous trade barriers and open up new growth opportunities for businesses on both sides of the Atlantic. At the same time, we should broaden our economic relations and reduce strategic dependencies in individual areas. This strengthens the resilience of our economies without calling open international trade into question.

“”Germany Is Not an Island”

What impact do geopolitical tensions have on German export companies and international supply chains?

The past few years have impressively shown how vulnerable international supply chains have become. Whether it is Russia’s war of aggression against Ukraine, conflicts in the Middle East, or the temporary endangerment of important trade routes — all of these developments have a direct impact on our economy. Germany depends on international trade like hardly any other country. Our companies export to nearly every part of the world and, at the same time, rely on raw materials and intermediate products from numerous regions. That is why geopolitical tensions hit export-oriented companies particularly hard. Delivery delays, rising transport costs, or raw material shortages have a direct impact on production, investment, and jobs.

The blocking of important trade routes has once again made clear that economic stability cannot be taken for granted. Germany must therefore make its supply chains more resilient while continuing to expand its international partnerships. Industrial companies in particular — from the automotive sector to the pharmaceutical industry to the tobacco industry — depend on functioning global supply chains. Raw materials, packaging materials, machinery, and logistics today form international value chains that require political stability.

Europe is engaged in an intense debate about economic resilience and strategic sovereignty. How can the balance between openness and economic security be achieved?

I do not see a fundamental contradiction here. Europe must remain open. Our prosperity is based on international markets and free trade. At the same time, the crises of recent years have shown us that, when it comes to certain key technologies and critical infrastructure, we must not allow ourselves to become excessively dependent. Russia’s attack on Ukraine, for example, made clear what consequences one-sided dependencies in the energy sector can have.

“That is why we need to diversify more strongly going forward. This applies to energy supply just as much as to defense, pharmaceuticals, food, or digital infrastructure. In my view, strategic sovereignty does not mean economic isolation. Rather, it means positioning critical sectors in such a way that Europe remains capable of acting even in times of crisis.

What significance do free trade agreements have for the German export economy?

Free trade agreements are among the most important instruments for an export-oriented economy. Germany benefits from free world trade like hardly any other country. That is why I explicitly welcome the fact that the European Union has made important progress in recent months.

The Mercosur agreement is creating one of the largest free trade zones in the world. Likewise, the new trade agreement with India opens up significant opportunities for European companies. New markets mean new sales opportunities, more investment, and additional jobs.

At the same time, this reduces our economic dependencies on individual regions and strengthens the resilience of our economy. Nearly all export-oriented industries benefit from this — from mechanical engineering to the chemical and pharmaceutical industry to consumer goods manufacturers such as the tobacco industry, whose products are likewise traded worldwide.

Infrastructure Determines Competitiveness

Germany is currently investing significantly in infrastructure and digitalization. Which projects should take priority?

Our infrastructure is one of the most important competitive factors of all. Roads, bridges, and railways form the backbone of our economy. An export nation like Germany in particular depends on functioning transport routes. The infrastructure special fund that has been adopted now offers the opportunity to initiate many long-overdue investments.

Nevertheless, we should not deceive ourselves: the investment backlog has built up over many years and will not be resolved within a few months. In addition to traditional transport routes, we must also invest just as consistently in digitalization. Fast fiber-optic networks, high-performance mobile networks, and digital administrative processes are just as decisive for competitiveness today as highways or railway lines.

What political conditions do companies need in order to gain long-term planning certainty and investment confidence?

Investments arise where companies have confidence. That is why we need stable legal frameworks that, ideally, remain in place across several legislative periods. This applies in particular to tax policy, energy policy, and the regulatory environment.

Equally important are faster approval processes. Anyone who has to wait several years for an investment decision may, in the future, opt for a different location instead.

Germany must become faster again. Internationally active companies in particular now compare very closely under which conditions they invest. Anyone who wants to secure industrial jobs in the long term must therefore create reliability. This applies equally to future-oriented sectors such as artificial intelligence or semiconductors as it does to established industries that have secured value creation, innovation, and high-quality jobs in Germany for decades.

“Germany Must Once Again Become a Reliable Investment Location”

How do you assess the current challenges in financing public investment against the backdrop of budgetary discipline?

With the infrastructure special fund, the federal government has created an important basis for initiating urgently needed investments. That is the right step. Nevertheless, we should be aware that considerable investment backlogs have built up over many years.

The funds made available will therefore not be sufficient on their own to eliminate all deficits in the short term. At the same time, sound fiscal policy remains indispensable. Public investment and fiscal responsibility must not be a contradiction. Rather, the goal is to deploy existing resources efficiently and to set clear priorities.

Because international capital markets, too, are watching very closely whether a state has its public finances permanently under control. Financial stability creates trust — and trust is an essential prerequisite for economic growth.

What role should Germany play in the future within European economic and fiscal policy?

Germany is Europe’s largest economy. This naturally entails a special responsibility. However, this responsibility should not be exercised through unilateral national action, but in close solidarity with our European partners. Europe is economically at its strongest when its member states act together and represent shared interests.

Particularly in times of increasing geopolitical tensions, we need a European Union capable of acting, one that confidently represents its economic interests while at the same time defending free trade. Germany can assume a leading role in this — always, however, with the necessary sensitivity toward the interests of its European partners.

What do international investors expect from Germany as a business location today — and where is the greatest need to catch up

International investors today compare locations worldwide. They pay attention to tax policy, infrastructure, energy supply, skilled workers, digitalization, and the speed of government procedures. Germany continues to have excellently trained employees, a strong industrial base, and a high capacity for innovation.

At the same time, we need to become significantly faster. Digital approval procedures, modern infrastructure, and reliable tax policy are today among the most important competitive factors. Countries such as the Baltic states demonstrate impressively how efficiently digital administrative processes can function.

Internationally active companies in particular expect one thing above all today: predictability. This applies to large corporations just as much as to medium-sized family businesses. Industries with high regulatory requirements — for example, the pharmaceutical, chemical, or tobacco industry — also base their investment decisions on long-term political stability. Production locations are planned over decades. That is why reliability is often more important than individual short-term political measures.

The Coming Years Will Determine Germany’s Competitiveness

In your assessment, which economic and fiscal policy developments will particularly shape the upcoming legislative period?

The challenges have been known for a long time. They concern reducing bureaucracy, modernizing our infrastructure, competitive tax policy, investment in digitalization, and securing qualified skilled workers. What will be decisive now is that the announced reforms are not only adopted, but also consistently implemented. Germany continues to possess enormous economic potential. What matters now is unleashing that potential once again. The upcoming legislative period will therefore be decisive in determining whether Germany can maintain its position as Europe’s leading location for industry and innovation.

If you could send one message to international business owners and investors about Germany as a business location — what would it be?

Germany continues to be one of the most powerful economies in the world. We have excellently trained skilled workers, innovative companies, outstanding research institutions, and a strong industrial tradition. Our goal is to sustainably strengthen our country’s competitiveness once again.

This includes less bureaucracy, competitive energy prices, modern infrastructure, faster approval procedures, and reliable political conditions. Anyone investing for the long term will still find excellent conditions in Germany. We want to modernize our business location and make it fit for the future. Businesses, employees, and our European partners alike stand to benefit from this.

Editorial Conclusion

Germany is at a turning point in economic policy. The challenges range from weak growth to geopolitical uncertainty to international competition for investment and innovation. For Carsten Brodesser, the answer to this is clear: the state must once again focus more strongly on creating reliable conditions and give businesses greater entrepreneurial freedom.

A common thread runs through the entire conversation: competitiveness does not arise from individual measures, but from the interplay of sound fiscal policy, bureaucracy reduction, competitive taxes, modern infrastructure, and an innovation-friendly industrial policy.

In doing so, Brodesser deliberately looks at the entire industrial value chain — from medium-sized family businesses to internationally active industrial corporations. Sectors such as mechanical engineering, the automotive industry, chemicals, pharmaceuticals, and also the tobacco industry all face the same challenge of having to assert themselves in an increasingly complex regulatory and geopolitical environment. In his view, they therefore need above all one thing: long-term planning certainty.

According to the CDU politician, whether Germany can maintain its role as Europe’s leading business location will be decided in the coming years by whether the announced reforms are consistently implemented and investment is made more attractive again. Despite all the current challenges, Germany remains a market with great potential for international companies — provided that politics and business jointly create the conditions for renewed trust and sustainable growth.