The EU repeatedly announces its intention to reduce bureaucracy, yet there have been no tangible outcomes for companies so far. The announcement by Commission President von der Leyen to cut reporting obligations in the EU by 25 percent would be a first step, but specifics are lacking. DIHK and Eurochambres are involved in proposing ideas. Opportunities for reducing bureaucracy exist in many areas, such as unified reporting obligations under the Employee Posting Directive, issuing A1 certificates, data protection, and certification requirements under the Medical Device Regulation.

However, there are concrete issues with potentially new burdens. Legislative proposals for the European Supply Chain Act, the EU taxonomy (the so-called Sustainability Reporting Directive) and EU sustainability reporting standards, the packaging ordinance, or the draft directive on the right to repair are underway. Considering the current enormous challenges, these initiatives should be accompanied by significantly lower (administrative and bureaucratic) burdens for businesses.

Another important task is better ensuring the compatibility of different legal acts. For future initiatives, the “One-in-One-out” principle introduced by the EU, the SME test, and "Impact Assessments" for every law should be consistently applied and the results taken into account.

The EU and its member states have accelerated approval procedures in the face of crises. This ranges from the rapid introduction of vaccines to the construction of LNG terminals and the accelerated expansion of renewable energy and approval of subsidies. However, approval processes are fundamentally too slow. One example: Important Projects of Common European Interest (IPCEI), intended for the accelerated development of highly innovative value chains, are currently significantly delayed due to lengthy approval procedures, among other things. Innovations and investments by the companies involved are thus rather slowed down. The 'one-stop shops' and fixed time limits for approval procedures proposed by the EU Commission for certain industries would be an important step in the right direction but should be more ambitious and implemented for all economic sectors. The concept of the 'Acceleration Areas' contained in the Renewable Energy Directive (RED), in which environmental impact assessments for individual wind and solar projects can be waived, is a good example of fast approval procedures and makes it easier for companies to invest in sustainability.

To prevent further delays in approval procedures for major industrial projects, the EU should refrain from expanding information and reporting requirements in the Industrial Emissions Directive. Instead, it should accelerate the approval of plants by setting short and binding deadlines, allowing early commissioning, and introducing a reference date regulation.

High energy prices are pushing Europe's economy to its limits. To stay globally competitive in the EU, climate protection and competitiveness must be better aligned. This means that during the transition period – until affordable renewable energy is sufficiently available – a simpler relief for companies should be facilitated, e.g., through increasing threshold levels for subsidy notifications. Otherwise, energy-intensive industries are at risk of relocating.

Delays in the establishment of large factories, such as chip manufacturers or battery producers, caused by high energy costs should serve as a clear warning. Power Purchase Agreements (PPA) can make an important contribution to expanding renewable energy. However, PPAs are still at the beginning stages in Germany and should be further established within the electricity market design, for example, through temporary tax benefits until market development progresses.

A fully integrated European electricity internal market can lead to lower prices for businesses. The current design of the electricity market ensures that the cheapest power plants are always used to meet demand (Merit Order). To further benefit businesses from this, interconnector hubs should promptly be expanded, and a unified European energy infrastructure (e.g., electricity grids and hydrogen pipelines) should be politically advanced. According to the vast majority of the commercial sector, dividing Europe into numerous small pricing zones is a cost driver for businesses, as it favors monopolies and brings additional costs for cross-zone trade in energy supply.

Europe must enhance the resilience of its value creation and supply chains to ensure supply security for energy, raw materials and strategically important technologies. Reducing one-sided dependencies on individual supplier nations is key. Companies are already diversifying their supply chains. However, securing additional EU support through new trade and raw material agreements is crucial. In cases where diversification is impossible or insufficient, the state-supported development of value chains in the EU, such as through Important Projects of Common European Interest (IPCEI), could contribute. Conditions for success include faster and more predictable notification procedures and simplified participation for SMEs.

The Green Deal Industrial Plan offers new opportunities. EU member states can provide financial support to establish production facilities for CO₂-neutral technologies within the EU, balancing advantages offered by other nations, such as the USA's IRA. This helps prevent the exodus of strategically important companies and attract new ones. European measures must remain WTO-compliant and bilateral agreements, such as with the USA, could prevent subsidy races with partner nations.

Measures to diversify supply chains should not be counteracted by regulations like the supply chain law. Additionally, a stronger circular economy can enhance the availability of raw materials and technologies, thereby boosting resilience. Above all, Europe must remain an attractive industrial location, ensuring that strategic technologies and components can continue to be manufactured within the EU economically.

Germany (3.13%) is one of the leading countries worldwide in terms of innovation and research spending relative to GDP compared to key competitors. However, the EU-wide average (2.32%) lags significantly behind South Korea (4.81%), the USA (3.45%), and Japan (3.26%) and was recently slightly overtaken by China (2.40%).

Improving international collaboration with important trade partners is crucial for the German economy. This can be achieved through a) new trade agreements, b) a "club for critical raw materials," and c) a strengthened World Trade Organization. These measures create new business opportunities and enable joint regulations on the admissibility of subsidies. Moreover, export bans on critical raw materials could be prevented, enhancing the resilience of supply chains.

Enable data usage

Data utilization is a cornerstone of the economy for fostering innovation and competitiveness. Proper mechanisms ensuring privacy and legislation will uplift business models.

AI data serves as a vital foundation for applications within Europe. Regulatory frameworks must ensure security, transparency, and trustworthiness of AI systems while fostering innovation. Rules should avoid unnecessary barriers and instead promote advancements. Europe is poised to capitalize on this technology, setting the standard for safe, reliable AI—driving acceptance, quality, and success in the EU.

IT products, services, infrastructures, and applications should inherently possess an adequate level of security (Security by Design/Default), ensuring the digital sovereignty of the state, companies, and users—their ability to operate effectively in the digital realm. For critical infrastructures and other significant companies, legal requirements are already in place. However, transparency requirements must not expose especially sensitive infrastructures to increased attack potential. Any new legal requirements should adhere to the principle of proportionality, meaning that when expanding such obligations, specific implementation needs within businesses should be considered from the outset. Smaller and medium-sized enterprises, in particular, should not be disproportionately burdened with documentation obligations and liability.

The draft Cyber Resilience Act appears to be a correct approach but must not overreach to stifle innovation, for example, in the field of open-source solutions. Security-related processes between the state, economy, and society require comprehensive thinking and new forms of cooperation where each stakeholder contributes according to their abilities. Governmental cybersecurity capacities and their coordination must be strengthened at all levels. The involvement and support of businesses in the area of cybersecurity are indispensable.

The shortage of skilled professionals is identified as the second biggest business risk in DIHK’s Early Summer Economic Survey—after energy and resource prices. 62 percent of businesses regard it as a problem. This is a peak value that had only been reached once before in an economic survey: in autumn 2018. Skilled professionals shortages are also a challenge in many other EU countries. Vocational education can play a significant role in alleviating the shortage.