The growth initiative is intended to stimulate the economy and increase the growth potential of the German economy in the medium and long term.

Three areas should be highlighted from the extensive package of measures:

1. The electricity price package to relieve the economy is extended. It has been in force since 1 January 2024 and was initially limited until the end of 2025. It has helped to ensure that energy prices are now back at the level they were at before the start of the Russian war of aggression against Ukraine following the peaks in 2022. It now includes a permanent reduction in the electricity tax to the European minimum rate for the entire manufacturing industry as well as agriculture and forestry. This will relieve the economy by around 3.3 billion euros per year. In addition, further measures will be implemented to curb electricity costs. In particular, the measures are intended to prevent further increases in grid fees. This will give companies more planning security in Germany.
2. The Federal Government is driving forward the reduction of bureaucracy. To this end, the growth initiative includes new measures, such as annual bureaucracy reduction laws, for which specific proposals can be submitted via an online portal. In addition, the obligations arising from the national Supply Chain Due Diligence Act will no longer apply to most companies and will be replaced by the European requirements. The data protection requirements for companies will be simplified.
3. The labour market is also to be given additional momentum through better work incentives and more skilled workers. For example, the growth initiative stipulates that employer bonuses for overtime, the extension of part-time working hours and the postponement of retirement are favoured. Work at retirement age will be made more attractive and flexible overall. In future, the federal government will allow employees to continue working for their current company for a limited period of time when they reach retirement age. In order to make Germany even more attractive for foreign skilled workers, the federal government will also introduce tax incentives for taking up employment in Germany. To this end, newly arrived skilled workers within certain income limits will be able to claim 30%, 20% and 10% of their gross salary tax-free for the first three years.

A detailed description of the individual measures of the growth initiative can be found on the website of the federal government in english and in german. The measures contained in the package will now be implemented quickly by the Federal Government through legislation.