Bureaucracy rampant

Business is big in Germany, but not easy, World Bank says

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Building permit? No problem. Just send in the form. Source: Picture Alliance

Germany might be Europe’s largest economy, one of the globe’s top exporters, and, for the World Economic Forum, even the most innovative country in the world.

But in the World Bank’s annual “Ease of Doing Business” report, the world’s fourth-largest economy ranks only 24th, four places lower than last year and just above Azerbaijan.

New Zealand, where it takes only half a day to get a new company approved, once again tops the ranking, followed by Singapore and Denmark. In Germany, it takes eight days to overcome all the bureaucratic hurdles to founding a company, putting the country in 114th place on that criterion.

The World Bank survey of 190 countries measures 11 criteria to determine its ranking. Among these are how long it takes a company to acquire real estate. Firms in Germany need a mind-boggling 52 days to complete the six necessary steps. This lands the country in 78th place. Other criteria are the conditions for foreign trade (40th), and the time to get a building permit (24th).

G S9 World Bank business ranking 2018

Politics disconnected from business

Germany makes the top five only in provision of electricity, quick processing for imports and unbureaucratic bankruptcy procedures. Other criteria include the tax system, the labor market, obstacles to foreign trade and protection of minority shareholders.

The World Bank counted 314 reforms worldwide over the past 12 months that make life easier for companies — a new record. Germany, however, comes out neither positive nor negative.

“That shows reform stagnation,” laments Michael Hüther, head of the Institute of the German Economy, an employer-affiliated group. “Politics has become disconnected from business.”

In fact, Chancellor Angela Merkel has never been too interested in business. As with everything else now that electoral setbacks are forcing her out, the question raised by the dismal World Bank report is whether her successor will do better on this score.

Torsten Riecke is Handelsblatt’s senior international correspondent. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the author: riecke@handelsblatt.com.

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