Survey shows: EU 'bureaucratic regulation' restricts business development

A large-scale survey released by the German Family Business Foundation on the 28th shows that European family businesses recognize the growth potential contained in the unified EU market, but the heavy bureaucratic regulatory system is becoming a core obstacle to corporate investment expansion.

This survey was conducted by Edelman Consulting, commissioned by the German Family Business Foundation, with assistance from the German Ifo Economic Research Institute. A total of 2100 executives from seven countries, including Germany, France, Italy, Spain, the Netherlands, Poland, and Sweden, were interviewed, of which about 80% were heads of various family businesses. The survey found that Polish, Swedish, and German companies believe that the economic attractiveness of the European Union has declined in the past two years, and German and Swedish companies are precisely the most active groups for investment within the EU.

Bureaucracy at the EU level has become the biggest obstacle for businesses to invest in the EU in the future. 83% of surveyed companies stated that the regulatory burden of the European Union hinders their investments in key areas such as digital transformation and cross-border market expansion.

The compliance pressure faced by German and Swedish companies is particularly prominent, with 34% of German and 28% of Swedish companies having regulatory compliance costs exceeding 7% of their total revenue. European companies also face difficulties in taxation, as tax policies are within the scope of member states' rights and responsibilities, and are now constantly influenced by the combination of EU and global rules. German, Swiss, and Polish companies generally feel that their country's tax system lacks competitiveness.

Regarding this, David Desner, General Manager of the German Family Business Foundation, commented that European family businesses are highly dependent on the EU single market, but have low trust in EU institutions, and lack confidence in whether reforms to reduce bureaucracy can be implemented.

Faced with difficulties, the interviewed companies have put forward clear demands to unleash the investment potential within the EU, requiring four key improvements: accelerating approval processes, reducing labor costs, creating more flexible labor markets, and promoting economic growth. In terms of improving the single market, the primary demand of European companies is to simplify and unify administrative processes, followed by building an integrated and competitive energy market.