The study is based on a survey of the 79 Industry and Commerce Chambers (IHKs) in Germany and the German Chambers of Commerce Abroad (AHKs) in all EU member states. With clear results: Free movement of goods and trade are far from reality. Improvements are urgently needed in many areas.

© DIHK / Werner Schuering

"German companies even occasionally report disproportionate and sometimes harassing bureaucratic hurdles," says DIHK President Peter Adrian. "If we are serious about Europe, we must finally abolish useless and unnecessary regulations across the board. Bureaucracy reduction is therefore also one of the central issues at the European level."

After all, Europe as the world's largest internal market offers unparalleled potential for companies and consumers. Two-thirds of total EU goods trade is accounted for by Union member states. Overall, more than 50 million European jobs have been created through it.

"We are standing in our own way"

The free movement of goods, people, services, and capital is the heart of European integration. "But we are standing in our own way. An internal market must first function internally to be able to exert force externally," says Adrian. He must "therefore be preserved primarily as a real market," the DIHK President states clearly. "But this can no longer work if he is economically suffocated by more and more regulations and sometimes contradictory political requirements."

Main problem: Posting of workers

At the top of the problems, according to DIHK findings, is the posting of workers. Unsuitable regulation goes hand in hand with additional national barriers. This begins with the differences between the reporting portals and extends to uncoordinated digital procedures and difficulties in minimum wage billing with foreign partner companies. It is particularly important for small and medium-sized enterprises to be able to deploy their employees on-site abroad at short notice when providing services.

© DIHK / Paul Aidan Perry

"Due to different and unnecessarily complex national implementation of EU law in the individual member states, companies incur high costs and legal uncertainties," explains DIHK Chief Legal Counsel Stephan Wernicke. "In case of errors, sanctions are imminent, sometimes it is a matter of criminal offences."

The flood of regulations is "now exorbitant": "Instead of supporting companies in their practice and leaving room for ideas, innovations, and development, they have to fill out hundreds of documentations and reports."

National solo efforts

Often companies in other EU countries are confronted with administrative portals that do not work in English, but only in the national language – Germany is no role model here either. E-commerce suffers from the fact that differing re-labeling is required depending on the country for mail-order business.

And the difficulties continue on a larger scale: the European supply chain law does not just apply outside the EU – the legislators assume that the internal market itself can no longer be considered a place of lawful trading. At the same time, companies' doubts about the rule of law in individual member states are growing while the EU is simultaneously curtailing companies' investment protection.

Legal neglect threatens

These and other examples from the survey illustrate according to Wernicke: "Good goals do not justify bad regulation. Legal neglect of the internal market is imminent if the guaranteed freedoms of the market, including in the digital economy, are no longer unquestionably secured."

Companies are even considering completely withdrawing from certain EU countries due to complicated procedures or limited legal protection. "That would be the opposite of what the EU internal market actually stands for. It will hit all of us," warns the DIHK Chief Legal Counsel. Because alongside companies, consumers are also affected. The costs arising from bureaucracy and legal uncertainties ultimately burden them as well.

Wernicke: "Politics is called upon and must focus on the essentials: Legal security, rule of law, and free competition in the common internal market are central location factors that need to be secured before new and barely reconcilable political goals are set."

Find the complete analysis available for download here:

DIHK survey on internal market barriers 2024 (PDF, 2 MB) (only available in German)