Bureaucracy breakdown: Trade association demands radical reforms for Austria!

Bureaucracy breakdown: Trade association demands radical reforms for Austria!

Retail in Austria is faced with a variety of challenges that are tightened by excessive bureaucracy. According to a report by the trade association, the sector is heavily regulated, and only France has stricter regulations. In international comparison, Austria occupies the penultimate place in relation to trade regulations. These regulatory hurdles in particular affect the competitiveness of small and medium -sized companies that suffer from a reform backlog. The trade association therefore calls for radical de -bureaucratization to strengthen the innovative strength of the industry.

In a worrying trend, the KSV1870 report over 1,146 bankruptcies in the trading sector last year, which means an increase of 16 % - this corresponds to four bankruptcies per working day. At the same time, retailers are facing high cost increases, such as rents, personnel, energy and logistics, while the sales are stagnating. Around 90 % of retailers perceive bureaucracy as stressful, a burden that has increased in the past five years. The bureaucratic jungle eats up to 15 billion euros annually in Austria, while Gold Plating, i.e. the overfilling of EU requirements, is burdening the business location with a further 500 million euros.

necessary reforms and proposed solutions

In response to this situation, the trade association has presented 16 specific suggestions for de-bureaucratization in the 2025 de-Bureaucratization paper. These include simplifications for reintegration, trial work, a harmonization of the tourism levy and the abolition of legal transactions. State Secretary Sepp Schellhorn has assured his support for these measures and the trade association appeals to the federal government to quickly implement the suggestions.

At the same time, the overarching problem of bureaucracy is addressed across Europe. A report by Mario Draghi on the competitiveness of the EU, which was published on September 11, 2024, is described as overdue. The trade association Germany (HDE) has welcomed the clear naming of the challenges and also demands a rapid reduction in bureaucracy. Antje Gerstein, HDE managing director, emphasizes the need to counteract the bureaucratic burnout. Draghi demands massive reduction in bureaucracy to generate necessary investments and increase competitiveness towards the USA and China.

The role of the EU

It is also important that more than 13,000 new legal files were passed in the EU from 2019 to 2024, while only around 3,500 new regulations came into force in the United States. The HDE reports alone of 120 new legislation, which were relevant for trade, whereby many of these regulations are difficult to implement in practice and lead to additional stress. Draghi sees the frequent changes in EU legal regulations and their burdens for medium-sized companies as central obstacles.

EU Commission President Ursula von der Leyen has highlighted the strengthening of the competitiveness of Europe as a leading topic of the new legislative period. The idea of a “compass for competitiveness” is planned, which is to be presented in mid -January. This includes three pillars: the reduction of the innovation gap to the USA and China, the reduction of strategic dependencies and the compatibility of decarbonization and competitiveness.

The implementation pressure on reduction in bureaucracy remains high. 95 % of the respondents in the IHK company barometer for the European elections 2024 require bureaucracy reduction as the top priority. In order to take this pressure into account, the EU is planning new initiatives, including an internal market strategy in June 2025 and a law to strengthen the circular economy for 2026.

Overall, the current developments and the various reports show that both national and European actors have to face the challenge of securing competitiveness through determined reduction in bureaucracy. The trade association and many industry participants hope for a faster implementation of the necessary reforms.