Germany’s recovery and resilience plan

RRF FUNDED PROJECTS IN GERMANY

WHAT’S IN THE PLAN?

The reforms and investments in Germany’s plan are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition. Following the Council approval of Germany’s plan on 13 July 2021, Germany’s recovery and resilience plan was updated on 16 July 2024 also to introduce a REPowerEU chapter. 

^{*This value includes also the part of the plan which is financed with national resources.}

• 28 investments and 17 reforms
• 49.5% of the plan will support climate objectives 
• 47.5% of the plan will foster the digital transition.  

The transformative impact of Germany’s plan is the result of a strong combination of reforms and investment which address the country’s specific challenges. The reforms address bottlenecks to lasting and sustainable growth while investment is targeted at decarbonising and digitalising all domains of German society. The plan will also strengthen social cohesion and education while unlocking Germany’s investment potential by addressing current bottlenecks. 

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

Germany’s plan now includes two new reforms, two new investments and one scaled up investment to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives. 

To finance this increased ambition, Germany has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €220 million. These funds are added to Germany’s REPowerEU grant of €2.1 billion. 

Key measures for REPowerEU

The REPowerEU measures include two new reforms aiming at accelerating the deployment of onshore and offshore wind energy power plants. 

Two new investments will promote the procurement of climate-friendly commercial vehicles, along with supporting the refuelling and charging infrastructure necessary for the operation of these vehicles. The investments will further accelerate the planning and approval of energy infrastructural projects through a digital end-to-end platform. 

One scaled-up investment on individual renovation measures will allow for more specific interventions applicable to a wider share of residential building stock with renovation needs.

Together, these measures are expected to increase Germany’s share of renewable energy and accelerate decarbonisation of energy generation, building and transport sectors.

In the area of climate and environmental policies, Germany faces the challenge of decarbonising its industry. Reducing greenhouse gas emissions also requires that Germany makes its transport sector more sustainable and renovates its building stock, to increase its energy efficiency.

Key measures for the green transition

• The plan includes €3.7 billion devoted to decarbonising the economy, especially the industry, with a focus on renewable hydrogen.
• €1.5 billion will be invested to help the German economy make the leap towards renewable hydrogen at all stages of the value chain (including production, infrastructure and use).
• €7 billion will be devoted to making the transport sector greener by supporting electric cars, clean buses and rail; the plan will provide financial support for the purchase of close to 960 000 zero- or low-emission vehicles.
• €6.2 billion will be spent on a large-scale renovation programme to increase the energy efficiency of residential buildings.

The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting 49.5% of the available funds to measures that support climate objectives. 

Digital challenges for Germany include lagging investments in digital infrastructure which would support the economic recovery and help reduce Germany’s gap with other countries in the coverage of very high-capacity networks. Moreover, there is a significant potential for improving the digital skills of the population, especially when it comes to ICT and education specialists.

Key measures for the digital transition

• A Europe-wide initiative in microelectronics and communication technologies amounting to €1.5 billion.
• A Europe-wide initiative on next generation cloud infrastructures and services for €750 million. 
• Making more than 115 federal and 100 of the most important regional public services digitally available, in line with the Online Access Act (€2.5 billion).
• Modernise and interconnect registers to reduce the administrative burden for businesses and citizens (€231 million). 
• Create the first national online education platform to help learners acquire competences based on their individual learning pathways (€529.4 million).

The modified plan continues to focus on the digital transition, devoting 47.5% of the available funds to measures that support digital objectives. 

Key challenges for Germany’s economy include subdued investment compared to savings due in part to regulatory investment bottlenecks. Moreover, while Germany performs well on employment, certain disadvantaged groups (including people with a migrant background) and women could be better integrated into the labour market. The education sector also faces an investment backlog.

Key measures in reinforcing economic and social resilience

• A reform to cap social contributions and another to provide additional courses and mentoring to pupils with a learning backlog, with a focus on core subjects and core competences to tackle the learning disparities created by the COVID-19 crisis.
• €500 million will also be spent to create 90 000 additional childcare places by building new childcare facilities and refurbishing existing ones.
• Supporting 70 000 apprentices during the crisis. 
• Public administration reforms and investment to strengthen the healthcare system amounting to €3 billion to digitalise hospitals and €684 million to modernise public healthcare offices.
• A package of reforms to unlock public investment and tackle investment bottlenecks.

Germany’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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