Merz, EU Bureaucracy, And Germany’s Illusion Of Reform

Submitted by Thomas Kolbe

In his government statement on October 16, Chancellor Friedrich Merz criticized European overregulation. He cited his own program for cutting bureaucracy in Germany. In reality, however, new layers of bureaucracy are being created domestically. Once again, Merz engaged in political shadow-boxing with his party colleague Ursula von der Leyen.

Chancellor Merz is proving to be a master of shadow-boxing and diversionary tactics. In his Thursday address, he used the EU Commission as a rhetorical punching bag, airing his frustration amid growing criticism of his government’s course.

He stated explicitly, referring to Ursula von der Leyen’s regulatory agenda: “Enough of the regulatory frenzy, faster procedures, open markets, more innovation, more competition. These are the goals we must achieve.” He added: “We don’t need more rules; we need fewer rules, better rules.”

The EU as Punching Bag 

And there it was again: the EU Commission as the punching bag for domestic failures. Merz is certainly correct in substance. Brussels is a regulatory leviathan, a bureaucratic mold suffocating economic processes across the European Union and stifling any hope for growth and innovation.

Yet it would be facile to blame Germany’s economic malaise solely on Ursula von der Leyen. Bureaucracy champion Germany has, through the adoption of grotesque EU regulations and on its own initiative, built a bloated administrative apparatus that costs the economy roughly €60 billion annually in direct costs. Including lost profits and other opportunity costs, the ifo Institute calculates a staggering €146 billion per year – a catastrophe.

For this reason, Merz announced a bureaucracy-cutting program: 25% of direct costs, or roughly €16 billion annually, should be saved, and 8% of public service staff reduced. In theory.

Theory vs. Reality 

In practice, the picture is different. One of the first acts of the new chancellor was creating a Ministry for Digital Affairs – an additional layer of superfluous ministerial bureaucracy. At the same time, the government is rolling out its mammoth debt package: a €500 billion special fund to be distributed over the next ten years.

These processes are not only costly but extremely personnel-intensive. Past state interventions illustrate the trajectory: the energy price brake – the infamous “double whammy” program under Chancellor Olaf Scholz – consumed around €200 billion and required more than 5,000 new administrative posts. The Climate and Transformation Fund, totaling €212 billion, added about 8,000 full-time positions across ministries, development banks, and partner institutions.

From these experiences, we know: every new state subsidy billion generates up to 25 new bureaucratic posts. With growing complexity, that number rises further. Accordingly, the government’s new debt initiative will likely create between 12,000 and 15,000 additional full-time public service positions. So much for bureaucracy reduction.

The Brussels Teflon Layer 

Of course, the chancellor’s critique of Brussels’ over-bureaucracy will simply slide off, like a Teflon coating. Brussels remains steadfast, defending its eco-socialist regulatory agenda and marching toward further centralization.

The explicit goal: concentrate political power in the hands of the EU Commission – at any cost. The EU has trapped itself in a centrally planned eco-socialism, losing the path toward a market-driven, decentralized allocation of power and economic processes.

In recent years, Brussels’ regulatory frenzy has only intensified, following a clear pattern. Laws like the Supply Chain Act exemplify how the sprawling Euro-bureaucracy permeates every level of economic activity with brute force and self-assuredness.

Only a bureaucrat could conceive forcing internationally competitive companies to meticulously document and align all processes with politically defined social and environmental mandates – irrespective of market competition or their limited pricing power.

Bureaucracy has taken on a life of its own, driven by power expansion. Bigger budgets, more subsidies – a self-reinforcing redistribution apparatus without political oversight, growing ever larger.

Continuing the Rhythm 

One recent example of grotesque, ideologically twisted EU regulation lies, unsurprisingly, in energy policy. Brussels has crafted, with a mix of hubris and detachment from reality, rules that are pushing the European gas market toward a geopolitical self-blockade.

At the center: new methane limits and the Corporate Sustainability Due Diligence Directive (CSDDD), passed in May 2024. What sounds like climate protection on paper could, in practice, destabilize Europe’s most vital energy source. “The worst, most irresponsible piece of legislation I’ve ever seen passed anywhere in the world,” said ExxonMobil CEO Darren Woods at the Energy Intelligence Forum 2025 in London.

The methane regulation will require all producers, exporters, and importers supplying gas to Europe to report annual methane emissions – even if the producing countries are outside the EU. By 2030, importers must prove compliance with as-yet undefined methane limits, or face hefty fines. The CSDDD simultaneously obliges companies to conduct comprehensive sustainability reporting – even if their exposure to the EU market is indirect.

Nothing New Under the Euro Sun 

For the U.S., currently Europe’s largest LNG supplier with 56% import share, this grotesque regulation feels like a de facto attack amid the ongoing trade frictions with the EU. Industry insiders openly admit the new rules are practically impossible to meet. The EU could see a sharp LNG import decline by 2026 – at a time when energy security, amid the chaos of renewables, has become a strategic survival issue.

In this context, we must conclude: the chancellor’s criticism of the EU and his bureaucracy-cutting program are nothing more than media smokescreens. In reality, Friedrich Merz shares the principle of central planning and state control of economic processes. Merz is, at heart, a supporter of the Brussels line. His supposed power struggle with Ursula von der Leyen is carefully choreographed theater.