The German Government Relys On Artificial Intelligence And Bureaucratic Scarcity To Restore The Economy

JAKARTA German Chancellor Friedrich Merz expressed his commitment to restoring the country's largest economic competitiveness in Europe after the cabinet approved a series of reform measures aimed at reducing bureaucracy and accelerating business processes through digitization and utilization of artificial intelligence (AI).

"We are well aware of the challenges facing Germany's current economy, but we have ambitions to return to the top," Merz said at a press conference at the Borsig Palace, a suburb of Berlin.

The Merz administration has previously shifted the direction of Germany's traditional fiscal policy which is known to be tight, by launching an infrastructure and defense package worth half a trillion euros to boost growth, after Germany's economy contracted for two consecutive years the only country in the G7 group to experience this.

A study by the Institute of Economics Ifo in November 2024 showed that excessive bureaucracy caused Germany to lose economic output of nearly 150 billion euros (approximately IDR 2,800 trillion) every year.

The modernization agenda announced Wednesday October 1 includes 23 main projects designed to improve people's daily lives, including:

Centralized online vehicle registration service

The company's establishment platform within 24 hours

Use of AI in court proceedings and visa verification

Faster procedures for recognition of the qualifications of foreign medical personnel

The establishment of a digital body to facilitate immigration and the integration of skilled workers

"We will bring this very concrete legislative proposal to the Bundestag (Germany parliament)," Merz added, quoted by VOI from Reuters.

According to the agenda, the bureaucratic cuts of 25% in the next few years have the potential to save up to 16 billion euros (around Rp. 300 trillion).

Merz also said that the cabinet would submit a number of additional draft laws this month, in order to be approved by the upper house of parliament before this year's final session in December.

In addition, the cabinet also approved plans to build a fusion nuclear reactor in Germany with a funding allocation of 1.7 billion euros. The government also gave the green light for a draft law to accelerate hydrogen infrastructure development by cutting down bureaucratic barriers.