Economy · State modernisation
Bureaucracy reduction: the cost of rules, and the cost of removing them
Few demands have been as constant in Carsten Linnemann’s career as cutting red tape — first for firms, now for doctors and nurses. This page measures the burden, follows the reforms and sets out what deregulation can put at risk.
How bureaucracy is measured
The Nationaler Normenkontrollrat (NKR), an independent advisory body to the federal government, has tracked the cost of federal rules since 2006. Its annual report of 2 October 2025 covers July 2024 to June 2025.
Who gained from the 2024/25 reduction
SourceNationaler Normenkontrollrat, Jahresbericht 2025, press release of 2 Oct 2025.
Two different measures
Bureaucracy costs in the narrow sense are the costs of information obligations: forms, reports, records and statistics. Compliance costs (Erfüllungsaufwand) are wider: all the time and money citizens, firms and administrations spend to follow a rule, including the substantive requirement itself — installing a filter, training staff, keeping a register.
The distinction matters. A rule can carry high compliance costs because its purpose is costly (safety equipment, for example) while generating little paperwork. Cutting it is a substantive policy decision, not merely “less bureaucracy”.
A caution from the NKR itself
NKR chair Lutz Goebel warned that the downward trend should be treated with caution, because several burdensome measures had been decided since August 2025, including the implementation of the EU’s NIS2 cyber-security directive and of sustainability reporting rules. Press reports put the expected additional burden from those two at about €3.7bn.
Where the burden falls
Six areas account for most of the debate. The reforms named are federal measures; much of the administration happens in the Länder and municipalities.
Permits and planning
Long approval procedures for infrastructure, energy, housing and industrial plants delay investment and raise its cost. The CDU’s Agenda 2030 called for faster approvals in transport, construction, digital infrastructure and industry. The NKR credits the 2025 “Bau-Turbo” for housing with up to €2.5bn a year in potential relief.
Reporting obligations
Statistical, tax and sustainability reporting fall hardest on small firms with no specialist staff. The Fourth Bureaucracy Relief Act, in force since 1 January 2025, shortened the retention period for accounting vouchers from ten to eight years.
Digital administration
Many services still require paper or in-person visits. The federal modernisation agenda includes a web portal for setting up a company within 24 hours and centralised online vehicle registration.
Business regulation
EU law generates a growing share of new obligations. The NKR recommends that Germany influence EU drafts earlier and with one voice, rather than trying to soften rules at transposition.
Government efficiency
The modernisation agenda also aims to cut federal personnel by 8%. Fewer staff and more digital processes are meant to go together; critics fear that cuts come first and digitalisation later.
Health care
Documentation duties, double audits and billing checks consume clinical time. Linnemann has made this a guiding theme of his ministry (see section 04).
Federal reforms since 2024
- 1 Jan 2025
Fourth Bureaucracy Relief Act in force
Expected relief for business of €944m a year; shorter retention periods for accounting documents. Adopted under the previous government. In force
- Jan 2025
CDU Agenda 2030
Promised faster approval procedures and less bureaucracy as part of a growth programme. Linnemann was Secretary-General. Political position
- May 2025
New Federal Ministry for Digital Affairs and State Modernisation
Created with the new government to steer administrative digitalisation. In implementation
- Oct 2025
Federal modernisation agenda
Cabinet adopts around 80 measures: cut bureaucracy costs by 25% (about €16bn) and compliance costs by about €10bn a year, reduce federal personnel by 8%. In implementation
- Sep 2026
Bürokratierückbaugesetz announced for health
Announced by Linnemann at the BMG hospital summit on 22 September 2026. Announced
Economic analysis
Why bureaucracy is hard to cut
Every form has an author, a purpose and a constituency that would notice if it disappeared.
Governments of every composition have promised less bureaucracy for two decades, and yet the burden keeps returning. The economics of regulation offers several reasons that do not depend on bad faith.
Asymmetric visibility. The benefit of a rule — an accident that did not happen, a fraud that was detected — is usually invisible, while its cost is felt every day. A rule is therefore easier to criticise than to defend, but the harm from removing it may only become visible years later.
Layering across levels of government. In Germany, the federal government legislates, but the Länder and municipalities administer most laws, and the EU sets a growing share of the rules. A federal relief law cannot simplify a permit procedure run by a district authority with its own software and staff. The NKR’s recommendation to influence EU drafts early and the modernisation agenda’s emphasis on central digital services both respond to this layering.
Distrust and double control. Where one institution does not trust another’s checks, it adds its own. In health care this is visible in overlapping audits of hospital billing and quality by insurers, the medical review service and supervisory authorities. Risk-based control — checking intensively where problems are likely and lightly where they are not — is the standard remedy, and it is what Linnemann has announced for the health sector.
Digital as a multiplier. A paper process converted one-to-one into an online form saves little. The gains come when data entered once can be reused across authorities, the “once only” principle. That requires registers, interfaces and legal permissions to share data — which raises data-protection questions of its own.
Measurement gaps. The NKR measures federal rules well, but Länder and municipal burdens far less systematically. Claims about total bureaucracy in Germany therefore rest partly on surveys of how firms perceive it, which measure something different from the statutory cost estimates and are not directly comparable with them.
From the Mittelstand to the hospital ward
As health minister, Linnemann has transferred his long-standing bureaucracy argument to the health system. The bill is announced, not yet published.
„Ärzte und Pflegekräfte sollen Zeit für ihre Patienten haben und nicht für Formulare verwenden.“
„Das geplante Bürokratierückbaugesetz soll zudem Doppelprüfungen reduzieren und risikoorientierte Kontrollen einführen.“
The logic is the same as in his economic programme: time spent on documentation is time not spent on the core task, and duplicated controls add cost without adding safety. In health, the core task is patient care, and the shortage of nursing staff makes every documentation hour more expensive. In the same budget speech he made “the person at the centre” his third guiding principle. More on the hospital context: hospitals and the health system.
Argument for reform vs. risks of deregulation
Most rules exist because something once went wrong. The question is whether a rule still achieves its purpose at a reasonable cost.
Argument for reform
- Cost: €64bn a year in information obligations for business alone is a drag on productivity, especially for small firms.
- Speed: slow permits delay investment in energy, housing and transport that the €500bn infrastructure fund is meant to finance.
- Trust: citizens judge the state by the services they experience; paper-based processes damage confidence.
- Staff shortages: in health and administration alike, documentation competes with core work for scarce people.
- Risk-based control: concentrating checks where risks are highest can improve protection while reducing routine audits.
Risks of deregulation
- Worker protection: working-time records and occupational safety documentation are how breaches are proved; removing them weakens enforcement.
- Environment: faster planning can mean less public participation and weaker environmental assessment, inviting later legal challenges.
- Consumer and patient protection: product, food and clinical quality rules prevent harm that markets punish only after the fact.
- Legal certainty: frequent rule changes, even simplifying ones, create transition costs and uncertainty for firms that have already adapted.
- Cost-shifting: fewer controls can move costs from firms to courts, insurers or those harmed.
The NKR’s own recommendations sit between the two: practical checks of draft laws before adoption, adequate consultation periods of at least four weeks, digital-by-default design and department-specific reduction targets — rather than wholesale repeal.
06 / Expert recommendations
What the Normenkontrollrat recommends
Department-specific targets
Reduction targets for each ministry, with transparent and verifiable cost tracking.
Binding checks in the legislative process
Combined practical, digital and citizen checks early in the drafting of every law.
Adequate consultation
A legally enforced minimum of four weeks for stakeholders to comment on drafts.
A centre for legislative drafting
Central expertise to support ministries in writing better laws.
Early influence in Brussels
A coordinated German voice on EU drafts before they are adopted.
Political steering from the top
Joint oversight by the digital ministry and the Chancellery, and modernisation as a directive from the Chancellor.
The test of a bureaucracy reform is not how many rules it deletes, but whether what the rule protected is still protected.
Verification noteThe NKR has published two different figures for the cumulative growth of compliance costs since 2011 in different documents. Because they conflict, this page does not use either. The NKR annual report for 2026 had not been published as of 8 October 2026.
Sources & further reading
- Nationaler Normenkontrollrat — Annual report 2025, press release (2 Oct 2025)
- Nationaler Normenkontrollrat — Jahresbericht 2025 (PDF)
- beck-aktuell — Trendwende beim Erfüllungsaufwand (16 Oct 2025)
- beck-aktuell — Cabinet adopts state modernisation plan (1 Oct 2025)
- Federal Government — Modernisierungsagenda (PDF) (2025)
- Federal Government — Fourth Bureaucracy Relief Act
- Federal Ministry of Health — Speech at the Krankenhausgipfel 2026 (22 Sep 2026)
- Federal Government — Health budget 2027 debate (10 Sep 2026)
- Deutsches Ärzteblatt — Linnemann sets out guiding principles (11 Sep 2026)
- Schwäbische Zeitung (dpa) — CDU Agenda 2030 (Jan 2025)