Like all other European Union member states, the German government draws up a national reform programme. It is the basis for the European Commission’s subsequent country-specific recommendations.

With its  Europe 2020 strategy, the European Union stipulates the general direction for fostering growth and employment this decade. It sees smart, sustainable, inclusive growth as the way forward in order to overcome structural weaknesses in the European economy, improve competitiveness and productivity and strengthen the sustainable social market economy. You will find more information here: European Commission.

In the reform programme now adopted, the German government lays out the national economic and financial measures it will be taking to realise the goals set last year at European level, within the framework of the European Semester.

The European Semester is a six-month cycle starting at the beginning of a calendar year, in which the coordination processes of the Stability and Growth Pact and the Europe 2020 strategy are aligned, and member states receive political guidance and recommendations in advance of their national budget procedures.

Strengthening innovation and investment

Germany will be taking measures to strengthen innovation and investment, particularly in the fields of infrastructure, digitalisation and education. Public investment at regional and municipal level, for instance, are to be stepped up. In addition, incentives will be created to raise employment rates. One example is the reduction in taxes and levies for low earners and secondary earners.

Social security contributions under 40 per cent

The German government intends to stabilise social security contributions at under 40 per cent (of gross wages, with half being paid by the employer and half by the employee). Compared to the previous year, significant progress has been made almost across the board on the core Europe 2020 targets, for instance in the field of energy efficiency and increasing employment rates, particularly among older age groups and women, although more efforts are still needed.