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Joint Task “Improving the Regional Economic Structure” (GRW): better funding opportunities for sustainable and climate-friendly investment in structurally weak regions

Going forward, the Joint Task – the most important instrument for fostering structural and economic development in Germany’s regions – will place an even stronger focus on providing funding for investment in energy transition-related technologies such as solar installations, wind turbines and electrolysers.

More than half of the German population live in rural areas, appreciating their quality of life, social cohesion and a labour market often dominated by SMEs. However, the opportunities are not the same everywhere. There are large differences between the regions in terms of economic structure and the conditions needed to deliver growth. The Joint Task “Improving the Regional Economic Structure” seeks to help structurally weak regions offset their competitive disadvantages. It is the central regional economic and structural policy instrument, which the Federal and Länder governments have been working on together since the 1970s in order to ensure the principle of equivalent living conditions for all as set out in the German Basic Law.

4.8 million jobs created

The Joint Task is one of Germany’s largest and most successful funding programmes. Up to this day, around €80 billion in funding has been provided under the programme, benefitting more than 150,000 companies and infrastructure projects, and creating and safeguarding 4.8 million jobs in the beneficiary companies. (A map showing various success stories related to the Joint Task can be found here (German only)).

However, the requirements towards regional structural policy have changed considerably in the last few years. This has to do with Germany’s commitment to become a climate-neutral economy by 2045, and with the economic impact of the energy crisis and demographic change. New strategies and funding are needed to respond to these new requirements, particularly in structurally weak regions. In December 2022, the Federal Government and the Länder therefore adopted the most extensive reform of the Joint Task (German only) to date (video by Minister Habeck explaining the reform (German only), which is to be transposed into the specific Länder rules and regulations and integrated in the funding practices of the Joint Task by the end of 2023. The modernised Joint Task now serves as the most important instrument for fostering and speeding up regional transformation.

More investment in forward-looking technologies

Building on the reform of the Joint Task, the Federal Government and the Länder agreed in September 2023 to focus more strongly on investment in forward-looking technologies in their activities for regional economic development. The decision (German only) on the expansion of the Joint Task means that – based on the Federal Framework for Transformational Technologies (German only), which in turn is based on the EU’s Temporary Crisis and Transition Framework (TCTF)), it will now be possible to provide government funding for investments in structurally weak regions for example to manufacture equipment and key components which are of strategic importance in the transition to a climate-neutral economy.

This means that the Joint Task can now be used to speed up and expand important investment for the future of Germany. Structurally weak regions are given support to create added value and skilled jobs in the area of renewable energy and thus to strengthen the potential for economic development. A detailed paper on the funding provided under the Joint Task can be found here (German only). The Federal Ministry for Economic Affairs and Climate Action’s dossier entitled “Strengthening economic development in the regions” provides additional valuable information online.

“Germany’s regions are facing enormous change: how are they to transition to climate neutrality, how to attract skilled labour in a time of demographic change and how to strengthen social cohesion – these are major tasks that we can only tackle by working together,” said Federal Minister Habeck at the first annual ‘Shaping Regional Transformation’ conference (German only), which was held in Rostock this September.