In its National Reform Programme 2024, the Federal Government outlines measures to implement the country-specific recommendations issued by the EU Commission. These recommendations relate to key economic and employment policy challenges such as promoting the energy transition and driving forward digitalisation. The specific recommendations are issued within the framework of the European Semester.

Introduced in 2011 as part of the Europe 2020 strategy, the so-called European Semester coordinates economic, financial and employment policy in the EU. It forms part of the European Union framework for economic governance. During the European Semester cycle, member states coordinate their budgetary and economic policies with the rules agreed on at EU level. The main objective of the European Semester is to ensure stability and sound public finance in the EU.

Better qualifications, more investment

According to the National Reform Programme 2024, the recommendations issued by the European Council are largely in line with the comprehensive and targeted supply policy pursued by the Federal Government. In addition to enhancing employment availability and qualifications, the Federal Government is particularly focusing on mobilising private sector investment.

Less inflation, falling energy prices

In February 2024, the price-increase rate dropped to 2.5 percent. This is the lowest figure since June 2021. Households will benefit in particular from falling energy prices and a decline in inflation in the food sector.

All in all, the Federal Government expects the inflation rate to fall significantly to 2.8 percent this year – down from an annual average of 5.9 percent in 2023. In view of falling inflation along with favourable wage and employment trends, the prospects for economic recovery are improving.

41 measures, 133 milestones: the Recovery and Resilience Plan

The National Reform Programme 2024 also includes a summary of the German Recovery and Resilience Plan (DARP). With the DARP, the Federal Government is sending out a clear signal in support of a climate-friendly and digital future: it involves extensive investments in the development of an efficient hydrogen economy, climate-friendly mobility and energy-efficient building refurbishment. A second focus is on the digitalisation of the economy and infrastructure, and also digitalisation in the education system.

Comprising 41 measures with 133 milestones and six priority areas, the DARP currently has a total volume of 28 billion euros. This also includes investments to strengthen social participation and in support of a healthcare system that offers pandemic resilience. 

Annual Economic Report 2024

At the end of February, the Federal Government published its Annual Economic Report 2024 outlining the measures it is taking to counter economic policy challenges such as high energy prices, the need for rapid diversification of the energy supply and the shortage of skilled labour. In order to avoid duplicating reporting structures here, the Federal Government mainly refers to the relevant sections of the Annual Economic Report.

Why is there a National Reform Programme?

The purpose of the annual European Semester is to help coordinate economic and financial policy more effectively within the EU. The National Reform Programme is one element within this coordination process. It has to be submitted to the European Commission in April each year and is the Federal Government’s response to the country-specific recommendations addressed to it by the Council of the European Union.

What happens next?

The National Reform Programme will now be submitted to the Bundesrat and the Bundestag. The plan is of the Bundesrat to debate the programme on 22 March 2024. Federal Minister of Economic Affairs Robert Habeck will then forward the report to the European Commission by the end of April.

How exactly does the European Semester work?

The European Semester coordinates economic, financial and employment policy within the EU. It forms part of the European Union framework for economic governance. During the European Semester cycle, member states coordinate their budgetary and economic policies with the rules agreed on at EU level. The main objective of the European Semester is to ensure stability and sound public finance in the EU. Here is a chronological overview:

• November: The EU Commission sets down the priorities and guidelines for the following year in its autumn package.
• February: The Commission publishes the reports along with an assessment of the economic and social policies of all EU countries.
• May to July: All countries receive specific economic and budgetary policy recommendations.
• August to October: The EU countries incorporate the recommendations in their reform plans and draft budgets for the following year.