Germany urges EU to simplify AI rules to boost business innovation
Federal Council's Economic Committee Approves Baden-Württemberg Proposal to Streamline EU AI Regulation
The Economic Committee of Germany's Federal Council (Bundesrat) has adopted a motion from Baden-Württemberg aimed at shaping European regulation of artificial intelligence (AI) in a way that minimizes bureaucracy and fosters innovation. The proposal comes in response to the EU's so-called Digital Omnibus, a package of measures designed to simplify digital legislation and remove obstacles to its practical implementation.
Practical Rules for Europe's AI Future
Dr. Nicole Hoffmeister-Kraut, Baden-Württemberg's Minister for Economic Affairs, Labor, and Tourism, stated: "Artificial intelligence is a cornerstone of Europe's competitiveness and digital sovereignty. Overregulation risks stifling the innovative power of our businesses. We need clear rules—but they must be workable in practice and not hold back our companies." Baden-Württemberg has long advocated for straightforward, lean requirements and a realistic approach to implementing the EU AI Act. "The Digital Omnibus is a step in the right direction, but it's only the beginning. Now, we must make regulation as a whole simpler, more transparent, and more aligned with the needs of businesses."
The Federal Council motion supports the simplifications proposed in the Digital Omnibus, including extended transition periods, targeted relief for small and medium-sized enterprises (SMEs), and the avoidance of duplicate regulations. At the same time, Baden-Württemberg identifies further areas requiring action.
Key Demands in Detail
Specifically, the state is calling for:
- Enhanced support and advisory services for businesses, particularly in the early phases when many interpretive questions remain unresolved.
- Simplified documentation requirements, such as standardized, user-friendly templates.
- Ongoing dialogue with SMEs and startups to identify burdens early and make targeted improvements.
- Low-threshold real-world labs that can be operated not only by authorities but also by companies and research institutions.
Safeguarding Competitiveness
With this initiative, Baden-Württemberg also seeks to bolster the competitiveness of Germany as a business location. "We face fierce international competition—from the U.S., from China, from other innovation hubs. If we move too slowly and make things too complicated, we will fall behind. Reducing bureaucracy and accelerating processes aren't favors to businesses; they're prerequisites for our economic success," the economics minister emphasized. She added: "Europe must strike the right balance on AI: protection yes, overregulation no. Only then can we secure innovation, value creation, and high-quality jobs in our country."
The motion will undergo final deliberations in the Federal Council's plenary session after all committee reviews are complete. The next plenary meeting is scheduled for March 6, 2026.
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