National Recovery and Resilience Plan: Germany

Abstract

By helping to give birth to the establishment of NextGenerationEU and the Recovery and Resilience Facility, the German government made a U-turn in relation to the Covid-19 pandemic compared with its earlier austerity approach in the management of the Euro crisis. Opposition to the new European debt and transfer instruments has been silent and political leaders have integrated the additional grants into their planning processes concerning changing the country’s energy supply and expanding digitalisation. While the Recovery and Resilience Plan was assessed positively, some preconditions for implementing it still seem to be missing, such as better electricity and high-capacity broadband networks. The process of transforming the German economy structurally to be greener and more digitalised has, however, neglected the social implications. While a minor proportion of the RRP will be spent on strengthening social resilience, many vulnerable groups are not in the focus of the state’s activities. The EU’s conclusions in the 2019 Country Specific Recommendations are treated rather in economic than in social terms. A sustainable new growth model would need to tackle also long-standing problems such as the high external surplus, the low public investment rate, income inequality and the relatively high at-risk-of-poverty rate.