NextGenerationEU: European Commission endorses Germany’s recovery and resilience plan

The European Commission has today adopted a positive assessment of Germany’s recovery and resilience plan. This is an important step towards the EU disbursing €25.6 billion in grants under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Germany’s recovery and resilience plan. It will play an important role in helping Germany emerge stronger from the COVID-19 pandemic.

The RRF – at the heart of NextGenerationEU – will provide up to €672.5 billion (in current prices) to support investments and reforms across the EU. The German plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Germany’s plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms set out in Germany’s plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

Securing Germany’s green and digital transition  

The Commission’s assessment of Germany’s plan finds that it devotes at least 42% of its total allocation to measures that support climate objectives. The plan includes measures to decarbonise industry, with a particular focus on renewable hydrogen, investments in sustainable mobility, and the renovation of residential buildings to improve their energy efficiency.

The Commission finds that Germany’s plan devotes at least 52% of its total allocation to measures that support the digital transition. The plan includes measures to support the digital transformation of public services, especially public health services, and businesses. The plan also includes measures addressing human capital and investments in advanced digital technologies, with a component on the digitalisation of education.

Reinforcing Germany’s economic and social resilience

The Commission considers that Germany’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations (CSRs) addressed to Germany by the Council in the European Semester in 2019 and in 2020. The plan provides for measures to tackle investment bottlenecks and reduce administrative burdens. It also addresses CSRs related to enhancing digitalisation of education, supporting students with disadvantages, enhancing provision of childcare, improving transparency of pensions and curbing increases in the tax wedge.

The plan represents a comprehensive and adequately balanced response to Germany’s economic and social situation, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.

Supporting flagship investments and reform projects

The German plan proposes projects in all seven European flagship areas. These are specific investment projects which address issues that are common to all Member States in areas that create jobs and growth and are needed for the twin transition. For instance, Germany has proposed to provide €2.5 billion to support the energy efficiency renovation of buildings and €2.5 billion to support the acquisition of electric cars.  

Planned Projects of Common European Interest in the areas of hydrogen, microelectronics and cloud and data processing open for participation to all interested Member States Central are elements of the German plan.

The Commission’s assessment finds that no measure included in the plan do any significant harm to the environment, in line with the requirements laid out in the RRF Regulation.

The control systems put in place by Germany are considered adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.

Members of the College said:

President Ursula von der Leyen said: “Today, the European Commission has decided to give its green light to Germany’s recovery and resilience plan. This plan contains essential measures that will support Germany to emerge from the COVID-19 crisis stronger. The reforms and investments outlined will contribute to the digitalisation and decarbonisation of the German economy so that it is better prepared for the future.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “This recovery plan will help Germany to emerge stronger after the crisis. It commits to significant spending to promote the green and digital transitions, and to reforms that remove barriers to investment. We welcome its focus on major projects of common European interest, particularly in digital areas such as micro-electronics and cloud infrastructure. In addition, it envisages boosting sustainable transport, improving energy efficiency renovation and developing an efficient hydrogen economy – important for the automotive industry. The plan will also help to strengthen education and skills, as well as to modernise public administration. Germany has made a significant effort to address the challenges that it faces: it is now time to put these commitments into practice.”

Paolo Gentiloni, Commissioner for Economy, said: “Germany’s recovery and resilience plan will give a useful impulse to the country’s green and digital transitions, with the funding allocated to these two priorities amply exceeding the agreed minimum requirements. Climate protection will be supported by efforts to develop an efficient hydrogen economy, investments in sustainable transport and energy-efficient building renovations, while digitalisation initiatives will lead to improvements in public services, healthcare and education. I also welcome measures to support disadvantaged groups and make it easier for women to participate in the labour market, for instance through expanded childcare services and all-day schooling, challenges that the Commission has long recommended that Germany address.”

Next steps

The Commission has today adopted a proposal for a Council Implementing Decision to provide €25.6 billion in grants to Germany under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal.

The Council’s approval of the plan would allow for the disbursement of €2.3 billion to Germany in pre-financing. This represents 8.7% of the total amount allocated to Germany.

The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms. 

For More Information

Questions and Answers: European Commission endorses Germany’s recovery and resilience plan

Recovery and Resilience Facility: Questions and Answers

Factsheet on Germany’s recovery and resilience plan

Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Germany

Annex to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Germany

Staff-working document accompanying the proposal for a Council Implementing Decision

Recovery and Resilience Facility

Recovery and Resilience Facility Regulation