At its meeting today, the Federal Cabinet adopted the 2016 National Reform Programme (NRP). The report shows that Germany's economic policy is continuing to foster investment and sustainable growth, thus contributing to stability and growth in Europe.
Federal Minister for Economic Affairs and Energy Sigmar Gabriel said: "The National Reform Programme shows that the German Federal Government is meeting its European obligations and strengthening the dynamism of the domestic economy. We have increased federal spending on investment and we are continuing to considerably ease the burden on the Länder and municipalities in order to enhance their scope for investment. Although we are facing new challenges resulting from the influx of refugees in particular, we are implementing the investment projects as planned. The Federal Government is also making great efforts to reduce the administrative burden on citizens and companies and to strengthen the market for venture capital, thus promoting private investment and innovation. Against the background of the current good situation on the labour market, the Federal Government and the Länder are making further efforts to increase the labour participation rate, e.g. by expanding childcare, supporting vocational training and creating incentives for people to stay longer in working life."
The NRP is important for the coordination of economic policies in the EU. It includes the Federal Government's comments on the European Commission's In-Depth Review in the context of the Macroeconomic Imbalances Procedure. According to these comments, the Federal Government shares the view of the European Commission that the German current account surplus is high, but does not represent an excessive imbalance. A large share of Germany's current account surplus is due to factors that economic policy measures in Germany are virtually unable to influence in the short term. These include the favourable euro exchange rate, the sharp drop in oil prices and the demographic development in Germany. Nonetheless, the Federal Government's measures to strengthen the dynamism of the domestic economy together with the positive development of income and employment in Germany make an important contribution to the reduction of imbalances in Europe.
The NRP is a report elaborated annually by the Federal Government in the context of the European Semester. The German 2016 NRP includes a response to the Commission's country report of 26 February 2016. In its annual country report, the Commission evaluates the implementation of the country-specific recommendations of the Council of the European Union to Germany and presents the results of the in-depth analysis in the excessive imbalance procedure. In addition, the NRP reports on progress made in the context of the Europe 2020 Strategy for Growth and Employment and on the measures of the German 2015 Euro Plus Pact Action Programme. The Federal Government will submit the 2016 NRP, to which the Länder have also made contributions, to the European Commission by the end of April.