German bureaucracy causes $154.3B loss per year: ifo Institute

By Emir Yildirim

ISTANBUL (AA) – Germany’s excessive bureaucracy causes up to €146 billion ($154.3 billion) loss a year in economic output, according to a report from the Munich-based researcher ifo Institute on Thursday.

The lack of digitalization of public administration greatly contributes to the high costs, as digitalization would reduce bureaucratic burden, the report said.

Manfred Gossl, the CEO of the Chamber of Industry and Commerce for Munich and Upper Bavaria, said in the ifo report that the three-digit-billion damage is “gigantic.”

Promoting digitalization to fight excessive bureaucracy, “companies need centralized online access to all business-related services and uniform, user-friendly solutions nationwide,” said Gossl.

“The large scale of the costs caused by bureaucracy illustrates how urgently reforms are needed,” said Oliver Falck, director of the ifo Center for Industrial Organization and New Technologies.

Falck noted that if Germany could attain the level of digitalization such as Denmark’s, the German economic output could be $101.4 billion per year higher.

“The costs of doing nothing are huge when measured against the untapped growth potential from reducing bureaucracy,” he added.