Radical Bureaucracy Plan: How Schleswig-Holstein Could Significantly Relieve Companies

Schleswig-Holstein's Minister of Economic Affairs, Claus Ruhe Madsen (CDU), signals openness to an unusually far-reaching reduction of bureaucracy—not as a piecemeal reform of individual forms, but as a systemic change. At the center is the question of whether documentation, reporting, and retention obligations for companies should not only be simplified, but also given an "expiration date," so that only truly necessary requirements return with renewed justification. The NDR reported on corresponding considerations.

Model Baden-Württemberg: Rules Expire—and Must Be Actively Justified

The starting point of the debate is an approach being politically advanced in Baden-Württemberg and also discussed in North Rhine-Westphalia: In Baden-Württemberg, a large block of company-related documentation, reporting, and retention obligations is to be fundamentally reviewed by the end of 2027. According to the logic of the model, obligations would not be automatically continued, but would have to be justified and individually re-enacted if they are to remain in force. Parliamentary documents from Baden-Württemberg link the reform objective to "leaner regulations" and the relief of companies, without endangering the rule of law.

This is accompanied by a "relief alliance" that explicitly calls on companies and the administration to report particularly burdensome reporting obligations from state law, so that effort and benefit can be systematically weighed against each other and requirements can be simplified or eliminated (Ministry of Economic Affairs Baden-Württemberg, press release from 19.02.2024).

Madsen's Signal: "Radical Cut" Instead of Ongoing Review of Individual Paragraphs

Madsen fundamentally rates this course positively, but emphasizes that the plans must be examined in detail. At the same time, he advocates for a much more decisive pace in reducing obligations. He spoke of a "radical cut" that would benefit the economy and described the approach as a "great idea" (NDR).

In doing so, he distances himself from the classic approach, in which regulations are reviewed individually and one after the other. The political appeal of a "sunset" approach, from the perspective of many companies, is that it reverses the burden of justification: companies no longer have to constantly explain why an obligation is too burdensome—the state would have to show which requirements are truly indispensable in practice.

Tests with Expiration Date: Suspend Rules for Two Years—Then Measure What Is Missing

In addition to the major cut, Madsen also brings up temporary tests: According to this, individual regulations could be suspended for two years in order to subsequently assess whether they are actually necessary (NDR). The design would be crucial: An effective test would have to define in advance how "necessity" is measured—for example, by risks to occupational safety, environmental standards, or tax control—and which data are collected alternatively so that the state remains capable of acting.

Support from Economic Research—but Not for a Blanket "Abolish Everything"

According to the NDR, support for the course also comes from research: The Kiel Institute for the World Economy (IfW) basically sees room to abolish reporting obligations, but at the same time points to limits, as certain data are necessary for sound economic policy. In substance, this fits the role of the IfW as an economic policy advisory research institute of the Leibniz Association with a strong focus on data, analyses, and evidence-based policy advice.

The point is practical: Anyone who abolishes obligations must decide which information the state will no longer receive in the future—and which data can, if necessary, be collected via leaner, more digital procedures. The debate is therefore less about "rules: yes or no," but about better rules and reliable impact control.

Why "Noticeable Relief" Is More Than a Political Promise

The fact that the call for relief is not just symbolic is also shown by findings from official statistics: Destatis describes in a publication on bureaucracy reduction that measures such as the Fourth Bureaucracy Relief Act aim to reduce the compliance burden on the economy by around 910 million euros—and at the same time explains why companies often only perceive relief as "noticeable" when it actually changes time and processes in everyday life.

This is precisely where the approach from Baden-Württemberg comes in, which Madsen now at least considers conceivable for Schleswig-Holstein: with obligations that arise every day in companies—reports, proofs, files, deadlines—and whose effort adds up to significant costs over the years, even though their benefit is often disputed in individual cases.

Opportunity for Schleswig-Holstein: Becoming Faster Than Larger Locations

Schleswig-Holstein could particularly benefit from a consistent reduction of bureaucracy, because short distances in administration and politics theoretically enable faster reforms. In this logic, the small size of the state would not be a disadvantage, but a locational advantage: If procedures are accelerated, responsibilities are clearer, and unnecessary obligations are eliminated, approvals and everyday administrative processes could work faster than in larger states.

Additional momentum comes from digitalization and AI: If routines such as standard notifications, document checks, or data collection are more strongly automated, bureaucracy can not only be "cut away," but also intelligently replaced—with less manual work in companies and administration. However, the same applies here: automation is not automatic. It only works if processes are simplified, data standards are set, and interfaces between authorities and companies are designed to be practical.

Whether and how Schleswig-Holstein will actually translate the "radical cut" into concrete legislative initiatives is open. However, it is clear: the debate is not about a blanket end to all rules, but about tough prioritization—which obligations actually protect, steer, or control effectively, and which could be eliminated without the state becoming blind and companies continuing to lose time in everyday life.