Can Germany's clogged-up bureaucracy be fixed?

Olaf Scholz has pledged to cut through bureaucracy to get the economy going again. If only it were that simple...

Photo by Viktor Talashuk on Unsplash

In the summer of 2022, I attended a Q&A session that Olaf Scholz held with members of the public in the city of Magdeburg. Coming only a few months after the Russian invasion of Ukraine, most of the questions centred on sanctions, energy costs and Berlin's response to the war.

But the response I found most revealing was on the dull topic of tax reform.

An audience member asked Scholz why the VAT rate on dog food is seven percent but on baby food it is 19 percent. Parts of the system “don’t seem very coherent to me,” the man said with obvious understatement.

“I don’t think you’ll find anyone who understands the list of VAT exceptions," Scholz replied with a grin, adding that "at any rate I don’t understand it.”

“But I can tell you that all attempts to change it have ended in a massive disaster," he continued. "If we were to lay an empty table today, we would definitely do differently. But the system is there now and I think we will have to live with it f…