German cabinet steps up efforts to cut red tape

BERLIN (Reuters) -Germany's cabinet announced on Wednesday 50 projects to streamline rules for business, seeking to kick-start growth in a long-struggling economy by cutting red tape.

Digital Minister Karsten Wildberger presented a report that the government says has already delivered a 3 billion euro ($3.5 billion) reduction in bureaucracy costs in the six months since it took office.

The coalition government has pledged to reduce companies' compliance costs by 25%, or about 16 billion euros, by the end of the legislative term, potentially in 2029.

Chancellor Friedrich Merz has said he plans to hold regular cabinet sessions on deregulation, possibly up to once a quarter.

INDUSTRY GROUPS SCEPTICAL

Measures include faster planning and permitting for transport projects and changes to construction contract law to reduce requirements.

The government will also raise the company-size threshold for appointing workplace safety officers to 250 employees from 50, a shift it says will eliminate more than 120,000 such posts.

Vice Chancellor and Finance Minister Lars Klingbeil said the aim was to "make it easier for companies to grow and invest".

But industry groups were unimpressed. The BDI industry association, which has tabled 250 proposals, said little has been implemented so far.

"There is a great deal of mistrust in business: every government announces it, but none follows through," said Wolfgang Grosse Entrup, head of the VCI chemicals lobby.

He said excessive forms and verification requirements from Berlin and Brussels weigh on industry more than energy prices and taxes.

Germany's Regulatory Control Council, an independent advisory body, also sounded a note of caution, estimating savings of only around 100 million euros from the package.

($1 = 0.8575 euros)

(Reporting by Andreas Rinke, Christian Kraemer. Writing by Maria Martinez. Editing by Mark Potter)