Structural Reform in Germany 2013-2017 (CR 2018)

  • Project lead:
  • Andreas Reinstaller

This study discusses structural reforms in Germany in the period 2013 to 2017, including their origins, intended impact, and experiences made with the reforms to date, as well as remaining reform needs. Structural reforms include all government policies and initiatives that aim at creating the right conditions for economic actors to increase the level of productivity of an economy in order to pave the way for higher growth, higher competitiveness and higher income in the future. The structural reforms to be analysed include national reforms aiming at improving the functioning of markets and the conditions for doing business. Reforms whose sole purpose is to implement EU legislation fall outside the scope of this study. Germany has made limited progress in addressing the 2017 country-specific recommendations. Limited progress has been made towards achieving a sustainable upward trend in public investment, including public spending on education, research and innovation. Some progress has been made in addressing capacity and planning constraints on infrastructure investment. There has been limited progress towards stimulating competition in the business services and regulated professions, reducing disincentives to work for second earners and helping them to move into standard employment, promoting higher real wage growth, and reducing the high tax wedge for low-wage earners. No progress has been achieved in making the tax system more efficient and conducive to investment.