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30/06/2004 - Germany has taken a series of necessary and important steps to reform regulations affecting business, but it needs to go further in order to strengthen its economic performance, according to a new OECD report.
Regulatory Reform in Germany: Consolidating Economic and Social Renewal notes the stabilising effect of Germany’s regulatory framework, which it says helped in coping with the pressures of German re-unification. But it also observes that re-unification absorbed energy and attention at a time when other countries were updating their regulatory structures. Germany now needs to make important structural adjustments in order to achieve stronger economic growth, it concludes.
The German government is one of a number of OECD countries – including all G7 countries – to have requested a broad review by the OECD of its regulatory practices and reforms. The report presents an overall picture, set within a macroeconomic context, of regulatory achievements and challenges including the quality of the public sector, competition policy and market openness.
Among specific recommendations, the report suggests that Germany should:
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Encourage entry and competition in the electricity, gas and pharmacies sector, as well as in craft services and professions;
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Improve market openness in public procurement;
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Consider trade and investment issues explicitly when assessing regulations;
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Cut red tape and administrative burdens to save time and reduce costs for firms;
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Get on with the privatization of the telecoms sector;
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Improve the political, institutional and practical support for regulatory quality;
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Communicate the objectives and benefits of reform – and the risks and costs of doing nothing.
Germany, the report notes, was among the first OECD countries to introduce government guidelines for regulatory quality. Its public administration has earned wide recognition for its reliability, legality and honesty. Competition law and policy enjoy an especially clear, coherent and comprehensive legal framework.
Looking ahead, the report recommends going beyond existing initiatives such as Agenda 2010, which is designed to reform the labour market and modernize social welfare systems, by targeting major sectors so as to promote change quickly and at lowest possible cost with the participation of all relevant stakeholders.
In the crafts sector, for example, regulations should be changed to make it easier and cheaper for people to qualify in such trades as plumbing and carpentry and restrictions on the services that such people can offer should be eased. In the pharmacy sector, it should be possible to ease restrictions on the number of outlets that can be controlled by a single owner without jeopardising consumer health and safety.
Elsewhere, the report notes, the creation of an independent regulatory authority for electricity and gas marked an important step towards a stronger and transparent policy framework. But both there and in the telecommunications sector, rigorous implementation and further structural reforms are needed to secure competition. Overall, competition law needs to restore the balance between promotion of competition and protection of specific markets.
Regulatory Reform in Germany: Consolidating Economic and Social Renewal is available to journalists on the password protected web site or on request from the Media Relations Division. For further information, journalists are invited to contact Spencer Wilson, OECD's Media Relations Division (tel. [33] 1 45 24 81 18) or Josef Konvitz, OECD's Regulatory Reform Division (tel. [33] 1 45 24 97 47).
Subscribers and readers at subscribing institutions can access the study via SourceOECD our online library. Non-subscribers will be able to purchase the study via our Online Bookshop.
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