German economy relieved: EU supply chain law misses majority

German economy easier
EU supply chain law misses majority

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The EU’s ambitious reform project to control supply chains still lacks a majority. This brings a sigh of relief to the German economy. Small and medium-sized businesses are now demanding that the national law with numerous reporting requirements also be examined.

The EU countries were unable to agree on the controversial supply chain law – to the delight of the German economy. The present compromise did not receive the necessary majority, as the Belgian Council Presidency announced in Brussels. A final vote in the European Parliament would have required a “qualified majority” of 15 EU countries, representing 65 percent of the EU population. In the traffic light government, the SPD and Greens were in favor of approval, the FDP against it. According to the coalition rules, the federal government must therefore abstain.

The directive should require companies to ensure compliance with human rights among their suppliers, too. The requirements should be applied to EU companies with at least 500 employees and a group turnover of over 150 million euros. In the event of violations, penalties of up to five percent of global sales will be due.

“German law also needs to be revised”

German companies are already subject to a national supply chain law. “German medium-sized businesses are drowning in reporting obligations and a flood of questionnaires even without additional burdens from Brussels,” said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura. “You can’t increase competitiveness by extending bad regulation to the whole of Europe.”

The planned European directive does not help human rights, harms medium-sized companies and makes it more difficult to diversify supply chains. “The German supply chain law must now be urgently revised,” demanded Jandura. Family business owners see it similarly. “I am very relieved that the way is now clear to develop more practical and effective regulation,” said its President Christine Ostermann.

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