Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Germany and delivering a Council opinion on the 2020 Stability Programme of Germany
Date: 2020-05-20
Institutions: European Commission, Secretariat-General
Subjects: Germany, digitisation, economic policy, economic recovery, economic reform, epidemic, infectious disease, investment, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 20.5.2020  COM(2020) 505 final  Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Germany and delivering a Council opinion on the 2020 Stability Programme of Germany   
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2020 National Reform Programme of Germany and delivering a Council opinion 
on the 2020 Stability Programme of Germany  

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof,  

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

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On  17  December  2019,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Strategy,  marking  the  start  of  the  2020  European  Semester  for  economic  policy 
coordination. It took due account of the European Pillar of Social Rights, proclaimed 
by the European Parliament, the Council and the Commission on 17 November 2017. 
On  17  December  2019,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the 
Commission also adopted the Alert Mechanism Report, in which it identified Germany 
as one of the Member States for which an in-depth review would be carried out. On 
the  same  date,  the  Commission  also  adopted  a  recommendation  for  a  Council 
recommendation on the economic policy of the euro area. 
The 2020 country report for Germany3 was published on 26 February 2020. It assessed 
Germany’s  progress  in  addressing  the  country-specific  recommendations  adopted  by 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
SWD(2020) 504 final. 

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(4) 

(5) 

the Council on 9 July 20194, the follow-up given to the recommendations adopted in 
previous  years  and  Germany's  progress  towards  its  national  Europe  2020  targets.  It 
also  included  an  in-depth  review  under  Article  5  of  Regulation  (EU)  No  1176/2011, 
the  results  of  which  were  also  published  on  26  February  2020.  The  Commission’s 
analysis led it to conclude that Germany is experiencing macroeconomic imbalances. 
In  particular, the high  current  account  surplus  reflects  a subdued level  of investment 
relative to savings and has cross-border relevance.  

On 11 March 2020, the World Health Organization officially declared the COVID-19 
outbreak  a  global  pandemic.  It  is  a  severe  public  health  emergency  for  citizens, 
societies  and  economies.  It  is  putting  national  health  systems  under  severe  strain, 
disrupting  global  supply  chains,  causing  volatility  in  financial  markets,  triggering 
consumer  demand  shocks  and  having  negative  effects  across  various  sectors.  It  is 
threatening  people’s  jobs,  their  incomes  and  companies’  business.  It  has  delivered  a 
major  economic  shock  that  is  already  having  serious  repercussions  in  the  European 
Union. On 13 March 2020, the Commission adopted a Communication5 calling for a 
coordinated economic response to the crisis, involving all actors at national and Union 
level. 

Several  Member States have declared a state of  emergency or introduced emergency 
measures.  Any  emergency  measures  should  be  strictly  proportionate,  necessary, 
limited in time, and in line with European and international standards. They should be 
subject to democratic oversight and independent judicial review. 

On  20  March  2020,  the  Commission  adopted  a  Communication  on  the  activation  of 
the general escape clause of the Stability and Growth Pact6. The clause, as set out in 
Articles 5(1), 6(3), 9(1) and 10(3) of Regulation  (EC) 1466/97 and Articles 3(5) and 
5(2) of Regulation (EC) 1467/97, facilitates the coordination of budgetary policies in 
times  of  severe  economic  downturn.  In  its  Communication,  the  Commission  shared 
with the Council its view that, given the expected severe economic downturn resulting 
from  the COVID-19 outbreak, the  current  conditions  permit  activation of the clause. 
On  23  March  2020,  the  Ministers  of  Finance  of  the  Member  States  agreed  with  the 
assessment of the Commission. The activation of the general escape clause allows for 
a temporary departure from the adjustment path  towards the medium-term budgetary 
objective,  provided  that  this  does  not  endanger  fiscal  sustainability  in  the  medium 
term. For the corrective arm, the Council may also decide, on a recommendation from 
the Commission,  to  adopt  a revised  fiscal  trajectory. The  general  escape  clause does 
not suspend the procedures of the Stability and Growth Pact. It allows Member States 
to depart from the budgetary requirements that would normally apply while enabling 
the  Commission  and  the  Council  to  undertake  the  necessary  policy  coordination 
measures within the framework of the Pact. 

(6) 

Continued  action  is  required  to  limit  and  control  the  spread  of  the  pandemic, 
strengthen  the  resilience  of  the  national  health  systems,  mitigate  the  socio-economic 
consequences through supportive measures for business and households and to ensure 
adequate  health  and  safety  conditions  at  the  workplace  with  a  view  to  resuming 
economic  activity.  The  Union  should  fully  use  the  various  tools  at  its  disposal  to 
support  Member  States’  efforts  in  those  areas.  In  parallel,  Member  States  and  the 
Union should work together to prepare the measures necessary to get back to a normal 

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OJ C 301, 5.9.2019, p. 117 
COM(2020) 112 final. 
COM(2020) 123 final. 

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(8) 

(9) 

functioning of our societies and economies and to sustainable growth, integrating inter 
alia  the  green  transition  and  the  digital  transformation,  and  drawing  all  lessons  from 
the crisis. 

The  COVID-19  crisis  has  highlighted  the  flexibility  that  the  single  market  offers  to 
adapt  to  extraordinary  situations.  However,  in  order  to  ensure  a  swift  and  smooth 
transition to the recovery phase and the free movement of goods, services and workers, 
exceptional  measures that prevent  the single market  from  functioning  normally must 
be removed as soon as they are no longer indispensable. The current crisis has shown 
the need for crisis preparedness plans in the health sector, which include in particular 
improved  purchasing  strategies,  diversified  supply  chains  and  strategic  reserves  of 
essential  supplies.  They  are  key  elements  for  developing  broader  crisis  preparedness 
plans. 
The  Union  legislator  has  already  amended  the  relevant  legislative  frameworks7  to 
allow  Member  States  to  mobilise  all  unused  resources  from  the  European  Structural 
and  Investment  Funds  so  they  can  address  the  exceptional  effects  of  the  COVID-19 
pandemic. Those amendments will provide additional flexibility, as well as simplified 
and streamlined procedures. To alleviate cash flow pressures, Member States can also 
benefit  from  a  100%  co-financing  rate  from  the  Union  budget  in  the  2020-2021 
accounting year. Germany is encouraged to make full use of those possibilities to help 
the individuals and sectors most affected by the challenges. 

The  socio-economic  consequences  of  the  pandemic  are  likely  to  be  unevenly 
distributed  across  sectors  and  regions  due  to  different  specialisation  patterns.  This 
entails  a  risk  of  widening  disparities  within  Germany.  Combined  with  the  risk  of  a 
temporary unravelling of the convergence process between Member States, the current 
situation calls for targeted policy responses. 

(10)  On 20 April 2020, Germany submitted its 2020 National Reform Programme and, on 
30  April  2020,  its  2020  Stability  Programme.  In  order  to  take  account  of  their 
interlinkages, the two programmes have been assessed at the same time. 

(11)  Germany  is  currently  in  the  preventive  arm  of  the  Stability  and  Growth  Pact  and 

subject to the debt rule.  

(12) 

In  its  2020  Stability  Programme,  the  government  plans  the  headline  balance  to 
deteriorate  from  a  surplus  of  1,4%  of  GDP  in  2019  to  a  deficit  of  7¼%  of  GDP  in 
2020.  After  decreasing  to  59,8%  of  GDP  in  2019,  the  general  government  debt-to-
GDP  ratio  is  expected  to  increase  to  75¼%  in  2020  according  to  the  2020  Stability 
Programme.  The  macroeconomic  and  fiscal  outlook  is  affected  by  high  uncertainty 
due to the COVID-19 pandemic.   

(13) 

In response to the COVID-19 pandemic, and as part of a coordinated Union approach, 
Germany has adopted budgetary measures to increase the capacity of its health system, 

7 
Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending 
Regulations  (EU)  No  1301/2013,  (EU)  No  1303/2013  and  (EU)  No  508/2014  as  regards  specific  measures  to 
mobilise  investments  in  the  healthcare  systems  of  Member  States  and  in  other  sectors  of  their  economies  in 
response to the COVID-19 outbreak (Coronavirus Response Investment Initiative) (OJ L 99, 31.3.2020, p. 5) and 
Regulation  (EU)  2020/558  of  the  European  Parliament  and  of  the  Council  of  23  April  2020  amending 
Regulations  (EU)  No  1301/2013  and  (EU)  No  1303/2013 as  regards  specific  measures  to  provide  exceptional 
flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak 
(OJ L 130, 24.4.2020, p. 1). 

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contain  the  pandemic,  and  provide  relief  to  those  individuals  and  sectors  that  have 
been particularly affected. According to the 2020 Stability Programme, in 2020 those 
budgetary measures amount to 7,2% of GDP. The measures include liquidity support 
for  companies,  targeted  assistance  for  small  companies  and  self-employed  by  grants 
and loans as well as easier access to short-time working schemes to prevent lay-offs. 
In  addition,  Germany  has  announced  measures  that,  while  not  having  a  direct 
budgetary  impact,  will  contribute  to  support  liquidity  to  businesses,  which  the  2020 
Stability  Programme  estimates  at  24,9%  of  GDP.  Those  measures  consist  of  loan 
guarantees mainly provided by the State-owned development bank KfW as well as by 
the new Economic Stabilisation Fund, created in response to the COVID-19 pandemic. 
Contrary  to  the  2020  Stability  Programme,  the  Commission’s  estimates  do  not 
consider  tax  deferrals  and  the  budgetary  compensations  for  decreasing  tax  revenues 
due  to  the  economic  downturn  as  discretionary  measures  with  a  budgetary  impact. 
Overall, the measures taken by Germany are in line with the guidelines set out in the 
Commission  Communication  on  a  coordinated  economic  response  to  the  COVID-19 
outbreak.  The  full  implementation  of  those  measures,  followed  by  a  refocusing  of 
fiscal  policies  towards  achieving  prudent  medium-term  fiscal  positions  when 
economic  conditions  allow,  will  contribute  to  preserving  fiscal  sustainability  in  the 
medium term.  

(14)  Based on the Commission 2020 spring forecast under unchanged policies, Germany’s 
general government balance is forecast at -7,0% of GDP in 2020 and -1,5% in 2021. 
The  general  government  debt  ratio  is  projected  to  reach  75,6%  of  GDP  in  2020  and 
71,8% in 2021.  

(15)  On 20 May 2020, the Commission issued a report prepared in accordance with Article 
126(3)  of  the  Treaty  due  to  Germany’s  planned  breach  of  the  3%  of  GDP  deficit 
threshold in 2020. Overall, the analysis suggests that the deficit criterion as defined in 
the Treaty and in Regulation (EC) No 1467/1997 is  not fulfilled. 

(16)  The first infection in Germany was registered on 27 January 2020 and the number of 
COVID-19  cases  started  to  increase  exponentially  in  March  2020.  The  German 
authorities  then  responded  with  confinement  measures  to  contain  the  spread  of  the 
virus,  such  as  closing  all  non-essential  retail  shops,  restaurants,  entertainment  and 
cultural establishments, sports facilities, schools and universities. All public gatherings 
of  more  than  two  persons  were  forbidden  and  people  were  asked  to  keep  all  social 
contacts to a minimum. Manufacturing has not been subject to confinement measures 
per se. However major factories were closed over a number of weeks due to disrupted 
foreign trade and squeezed demand. The economic outlook deteriorated strongly, with 
the  spring  forecast  of  the  Commission  pointing  to  a  GDP  decline  of  6,5%  in  2020. 
Even if the expansion of short-time work arrangements (Kurzarbeit) helps companies 
to  keep  their  workers,  an  increase  in  unemployment  looks  impossible  to  escape. 
According  to  the  forecast,  unemployment  is  expected  to  rise  to  4%  in  2020  and 
recover to 3,5% in 2021.  

(17)  To cushion the economic fallout, the German government has reacted quickly and has 
adopted far-reaching measures. Up to EUR 50 billion are being offered in immediate 
assistance  (direct  grants)  to  small  businesses,  the  self-employed  and  freelancers. 
Through the newly created Economic Stabilisation Fund and the public development 
bank  KfW,  the  government  has,  with  an  allocation  of  public  guarantees  of  at  least 
EUR 822 billion (24% of GDP), expanded the volume of and access to loans for firms 
of  different  sizes  covering  up  to  80-90%  of  the  lending  bank’s  credit  risk  (in  some 
special  cases,  up  to  100%).  The  Economic  Stabilisation  Fund  can  also  support  large 

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companies by providing  additional equity  capital  on a temporary basis. To boost the 
liquidity  of  companies,  adjustments  to  tax  deferrals,  prepayments  and  penalties  have 
been  adopted.  Insolvency  rules  have  been  modified  to  avoid  technical  insolvency 
procedures.  The  individual  states  (Länder)  are  complementing  the  federal  measures 
with  their  own  support  programmes.  In  the  process  of  designing  and  implementing 
these  measures,  the  resilience  of  the  banking  sector  needs  to  be  taken  into  account. 
The COVID-19 crisis is likely to exert further pressure on the already low profitability 
of  the  German  banking  sector.  Thus,  further  reducing  costs  appears  warranted  for 
German banks to ameliorate profitability and free up funds for information technology 
investment and organic capital creation. Further consolidation would also help in this 
regard. 

(18)  After starting strongly at the beginning of the year, the labour market has deteriorated 
as  a  result  of  the  COVID-19  pandemic  and  related  lockdown  measures.  To  cushion 
both  the  employment  and  social  impacts  of  the  crisis,  the  government  has  provided 
substantial  support  through  the  short-time  work  arrangement  scheme  ‘Kurzarbeit’.  It 
eased  conditions  for  accessing  it,  retroactively  extended  the  scheme  to  temporary 
agency  workers  and  increased  its  generosity.  This  helps  to  preserve  jobs  and  protect 
household incomes. Employers are receiving financial relief by not having to pay the 
social  security  contributions,  for  the  lost  working  time.  The  facilitated  access  to 
minimum  income  support  (based  on  Book  II  of  the  German  Social  Code 
‘Sozialgesetzbuch/SGB’) provides relief against income losses. Low-income families 
are  being  supported  through  easier  access  to  child  allowances  and  the  minimum 
income. In addition, tenants facing a loss of income are temporarily protected against 
eviction.  While  Germany  performed  well  on  the  Social  Scoreboard  supporting  the 
European Pillar of Social Rights, gaps in coverage, if not closed, may lead to reduced 
income for vulnerable groups in the context of the current crisis.  

(19) 

In  tackling  the  health  consequences,  Germany  benefitted  from  its  universal  health 
system  that  provides  access  to  high-quality  care  and  managed  to  rapidly  increase  its 
testing  and  intensive-care  capacity.  The  ongoing  COVID-19  crisis,  however, 
underlines the continuous need to strengthen the resilience of the health system. The 
availability of nursing staff and the attractiveness of the nursing profession remain an 
issue. Despite a comparatively high number of practicing nurses per capita, hospitals 
have  increasingly  reported  unfilled  positions  for  nurses.  Coordination  between 
healthcare providers in primary and hospital care, and between health and social care, 
could also be improved and supported by digital tools. E-health infrastructure is being 
deployed  at  an  accelerated  pace,  but  the  use  of  online  health  and  care  services,  e-
prescriptions and medical data exchange remains well below the EU average. A new 
law passed in March 2020 helps mitigate the economic consequences from COVID-19 
primarily  for  hospitals  and  doctors  in  private  practice.  Nevertheless,  the  long-term 
financing of healthcare institutions will have to be secured in order to maintain care in 
all  areas,  as  the  postponement  of  dispensable  surgeries  and  treatments  hurt  the 
financial revenues of institutions in the health sector, and available resources are being 
used to purchase priority tests and equipment. With a strong research base, Germany 
has the capacity to engage in specific research and innovation measures to respond to 
the COVID-19 crisis, including the development of vaccines and therapeutics and the 
development of a research network to bundle and strengthen the research activities of 
German  university  medicine  and  provide  support  to  the  Coalition  for  Epidemic 
Preparedness Innovations.  

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short- 

recent 

initiatives,  meeting 

(20)  To  foster  the  economic  recovery,  it  will  be  important  to  frontload  mature  public 
investment  projects  and  promote  private  investment.  Public  and  private  investment 
continued  to  increase  robustly  in  2019  but  lagged  behind  investment  needs.  Public 
investment  is  below  the  replacement  rate  at  municipal  level,  where  the  backlog  of 
investments  remains  high  at  4%  of  GDP  and  is  still  held  back  by  capacity  and 
planning constraints.  Investments in green technologies and energy that have already 
been  planned  can  be  frontloaded,  for  instance  projects  for  building  renovations  and 
renewables.  Despite 
and  medium-term 
decarbonisation targets and 2050 climate neutrality targets remains a challenge. This is 
also  true  for  environmental  and  energy  efficiency  targets,  as  price  incentives, 
especially with low oil prices due to the current COVID-19 crisis, discourage climate 
and  environmentally-friendly  behaviour.  Germany’s  transformation  to  a  climate 
neutral economy will require sizeable private and public investment over a sustained 
period  in  renewable  energy,  electricity  infrastructure,  energy  efficiency,  circular 
economy  and  sustainable  transport,  among  others.  Furthermore,  Germany’s  Federal 
Audit Office criticised the cost-effectiveness of measures related to the green energy 
transition.  More  efforts  and  sustained  investments  in  energy  networks  are  needed  to 
reap the benefits of a fully integrated sustainable energy system, with consistent price 
signals. Clean mobility can be promoted through appropriate regulatory measures and 
with  stronger  and  faster  investment  in  sustainable  transport  infrastructure  and  clean 
mobility  solutions.  Additional  investment  in  research  and  development  (R&D)  is 
essential  to  foster  a  recovery  towards  a  more  sustainable  and  competitive  economy. 
Spending on education and research remained at 9,1% of GDP in 2018, falling short of 
the  national  target  of  10%.  Private  R&D  investment  is  increasingly  concentrated  in 
large firms. The supply of housing remained well below the annual housing target of 
building  375,000  new  flats  between  2017  and  2021,  in  spite  of  policy  measures. 
Policies encouraging investment into new housing, would address this imbalance and 
improve  housing  affordability.  The  programming  of  the  Just  Transition  Fund  for  the 
period 2021-2027 could help Germany to address some of the challenges posed by the 
transition  to  a  climate  neutral  economy,  in  particular  in  the  territories  covered  by 
Annex D to the country report. This would allow Germany to make the best use of that 
fund.  

(21)  A  modern  digital  infrastructure  and  digital  services  are  crucial  when  mobility  is 
restricted.  Investments  in  digital  infrastructure  and  public  services  can  support  the 
economic  recovery  and  help  reduce  Germany’s  gap  with  other  countries  in  the 
coverage of very-high capacity networks, which remains substantial. In Germany, that 
coverage was 32,7% in 2019, compared to an EU average of 44%, while the fibre to 
the premises coverage was 10,5%, well below the EU average of 33,5%. The COVID-
19  crisis  underlined  the  importance  of  connected  digital  services.  Connectivity  gaps 
can  be  a  main  factor  hampering  investment  in  digitalisation,  in  particular  for  small- 
and medium-enterprises (SMEs), which remain slow adopters of digital technologies. 
Germany still underperforms in digital public services among Member States, despite 
an  improvement  in  such  services  for  businesses.  However,  the  level  of  online 
interaction  between  the  public  authorities  and  the  general  public  is  very  low. 
Implementation  of  the  Online  Access  Act  is  proceeding  slowly,  and  it  will  be  a 
challenge to meet the goal of digitalising all 575 services by the end of 2022. The Act 
should  be  implemented  by  all  public  bodies  involved  –  federal,  state  and  local 
authorities  –  in  order  to  generate  more  significant  improvements  in  digital  public 
administration.  

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It  is  important  to  keep  regulatory  and  administrative  burdens  low  for  the 
implementation  of  the  support  measures  and  beyond.  Keeping  the  administrative 
burden  at  a  minimum  for  access  to  support  measures  should  ensure  that  smaller 
businesses  receive  the  same  support  from  intermediaries  as  larger  ones.  Reducing 
other administrative burdens more broadly, i.e., beyond support measures, for example 
by  applying  flexibility  for  non-essential  bureaucratic  procedures,  can  provide 
additional relief to SMEs.  

(23)  Already  before  the  emergence  of  the  COVID-19  crisis,  technological  progress  was 
transforming the labour market, requiring increased funding of education and training, 
including /reskilling and upskilling and improving digital skills. The COVID-19 crisis 
made this need even more pressing, in particular in the case of workers employed in 
sectors that may be impacted for a longer time by social distancing or those at risk of 
becoming unemployed. The sudden shift to a more digitalised society and home-based 
education may pose a particular challenge  for vulnerable pupils and students who do 
not have access to digital solutions and support at home. This includes students with 
disabilities.  Special  care  is  needed  to  ensure  that  all  pupils  and  students  acquire  the 
key skills set out in the curriculum and that the months of disruption due to COVID-19 
do not result in a lifetime of disadvantage. Already existing inequalities in basic skills, 
linked to socio-economic and migrant backgrounds, risk to be exacerbated. The crisis 
has  highlighted  the  importance  of  further  developing  the  educational  system  to 
promote a smart and inclusive recovery and to stay on track to pursue the green and 
digital transition.  

to  address  medium- 

(24)  While the present recommendations focus on tackling the socio-economic impacts of 
the  pandemic  and  facilitating  the  economic  recovery,  the  2019  country-specific 
recommendations adopted by the Council on 9 July 2019 also covered reforms that are 
essential 
structural  challenges.  Those 
recommendations remain pertinent and will continue to be monitored throughout next 
year’s  European  Semester  annual  cycle.  That  also  applies  to  recommendations 
regarding investment-related economic policies. The latter recommendations should be 
taken  into  account  for  the  strategic  programming  of  cohesion  policy  funding  post-
2020, including for mitigating measures and exit strategies with regard to the current 
crisis. 

long-term 

to 

(25)  The  European  Semester  provides  the  framework  for  continuous  economic  and 
employment  policy  coordination  in  the  Union,  which  can  contribute  to  a  sustainable 
economy.  Member  States  have  taken  stock  of  progress  regarding United  Nations’ 
Sustainable  Development  Goals  (SDGs)  implementation  in  their  2020  National 
Reform  Programmes.  By  ensuring  the  full  implementation  of  the  recommendations 
below, Germany will contribute to the progress towards the SDGs and to the common 
effort of ensuring competitive sustainability in the Union.  

(26)  Close coordination between economies in the economic and monetary union is key to 
achieve  a  swift  recovery  from  the  economic  impact  of  the  COVID-19.  Germany 
should,  as  a  Member  State  whose  currency  is  the  euro  –  and  taking  into  account 
political  guidance  by  the  Eurogroup  –  ensure  its  policies  remain  consistent  with  the 
euro area recommendations and coordinated with those of the other euro area Member 
States. 

(27) 

In  the  context  of  the  2020  European  Semester,  the  Commission  has  carried  out  a 
comprehensive  analysis  of  Germany’s  economic  policy  and  published  it  in  the  2020 
country  report.  It  has  also  assessed  the  2020  Stability  Programme  and  the  2020 

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(29) 

National  Reform  Programme  and  the  follow-up  given  to  the  recommendations 
addressed  to  Germany  in  previous  years.  It  has  taken  into  account  not  only  their 
relevance for sustainable fiscal  and socioeconomic  policy in  Germany, but  also  their 
compliance with Union rules and guidance, given the need to strengthen the Union’s 
overall  economic  governance  by  providing  Union-level  input  into  future  national 
decisions.  

In  the  light  of  that  assessment,  the  Council  has  examined  the  2020  Stability 
Programme and its opinion8 is reflected in particular in recommendation (1) below.  

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined  the  2020  National  Reform  Programme  and  the  2020  Stability  Programme. 
The present  recommendations take into account the need to  tackle the pandemic and 
facilitate  the  economic  recovery  as  a  first  necessary  step  to  permit  an  adjustment  of 
imbalances.  Recommendations  directly  addressing  the  macroeconomic  imbalances 
identified by the Commission  under Article 6 of  Regulation  (EU) No 1176/2011  are 
reflected in recommendation (2), 

HEREBY RECOMMENDS that Germany take action in 2020 and 2021 to: 

1. 

2. 

In  line  with  the  general  escape  clause,  take  all  necessary  measures  to  effectively 
address the pandemic, sustain the economy and support the ensuing recovery. When 
economic  conditions  allow,  pursue  fiscal  policies aimed  at  achieving  prudent 
medium-term  fiscal  positions  and  ensuring  debt  sustainability, while  enhancing 
investment.  Mobilise  adequate  resources  and  strengthen  the  resilience  of  the  health 
system, including by deploying eHealth services.   

Front-load  mature  public  investment  projects  and  promote  private  investment  to 
foster the economic recovery. Focus investment on the green and digital transition, in 
particular  on  sustainable  transport,  clean,  efficient  and  integrated  energy  systems, 
digital  infrastructure  and  skills,  housing,  education  and  research  and  innovation. 
Improve digital public services across all levels and foster the digitalisation in small 
and medium-sized enterprises. Reduce the regulatory  and administrative burden for 
businesses.  

Done at Brussels, 

For the Council 
The President 

8 

Under Article 5(2) of Council Regulation (EC) No 1466/97. 

EN 

8 

  EN