Economy on the brink: CFOs fight against bureaucracy and uncertainty!

Economy on the brink: CFOs fight against bureaucracy and uncertainty!

Financial decision-makers in Germany are sounding the alarm: increasing economic uncertainty coupled with growing bureaucracy represents significant obstacles to investment and growth. According to a current survey by credit insurer Coface, which was carried out in March 2025, 83% of CFOs perceive economic volatility as their biggest concern. In addition, 79% of those surveyed cited exploding bureaucratic costs as a central problem that is slowing economic growth. These raised concerns come in a context where the economic policy uncertainty index reached a record high in April 2025.

Another report from the Family Business Foundation, which was published in the Ifo Institute's Annual Monitor 2024, shows alarming trends: 90.8% of the 1,763 companies surveyed report an increase in the burden of bureaucracy since 2022. The manufacturing industry and medium-sized businesses are particularly affected. In order to comply with increasingly complex regulations and lengthy approval procedures, 45.6% of companies have postponed investments. In addition, 42.6% of companies are considering (partial) relocation abroad.

Bureaucracy as a brake on growth

The negative effects of bureaucracy are particularly evident in the planning of the top 500 family businesses: 56.9% of these companies intend to postpone planned projects. A central problem is the high administrative effort, as only 5% of the companies surveyed can handle more than 80% of their administrative tasks digitally. In addition, only 8.5% report smoothly functioning digital administrative processes. This often leads to a backlog of innovation, as the high time expenditure and frustration in administrative communication are a significant burden.

The CFOs' demands are clear: According to the Coface study, 62% want tax relief, while 59% demand a reduction in bureaucracy and 50% demand falling energy costs. A large number of CFOs are particularly critical of the federal government's planned 500 billion euro infrastructure fund, which they see as subordinate. The study results indicate that without far-reaching reforms, Germany will become less attractive as a location.

Potential through reducing bureaucracy and digitalization

The need to act is also emphasized by experts such as Professor Oliver Falck from the Ifo Center for Industrial Economics and New Technologies, who calls for comprehensive reform to reduce bureaucracy. Research shows that bringing bureaucracy in line with Swedish levels could increase Germany's gross domestic product by 146 billion euros annually. In addition, digitalization of public administration that reaches the level of Denmark could increase economic output by 96 billion euros per year.

Small and medium-sized companies particularly suffer from the enormous administrative burden. Manfred Gößl, General Manager of the IHK for Munich and Upper Bavaria, emphasizes the responsibility of politicians to simplify bureaucratic requirements and constantly changing laws in order to avoid significant additional costs for companies. The bureaucracy cost index (BKI) records and transparently presents these additional costs, which amount to around 146 billion euros annually.

In summary, it can be said that the current situation presents companies in Germany with major challenges. According to CFOs and family business owners, the demand for decisive, structural and practical action is unmistakable. Otherwise, this could have serious consequences for the competitiveness and growth of Germany as a business location.

You can find more information on these topics in the reports from Risknet and German business news.