Germany’s Regional Policy Task of Improving Regional Economic Structure

In the Federal Republic of Germany, regional policy is primarily the remit of the federal states (Länder) and the regional administrative bodies. Under the principle of subsidiarity, it is the task of the regions themselves to foster and fund regional development. However, should the Länder and their regional authorities face regional structural problems they are unable to resolve through their own efforts, they are entitled to support from Federal Government flanking policies.

The policy enshrined in the Joint Task of Improving Regional Economic Structure (Gemeinschaftsaufgabe – GRW) offers the Federal Government and the Länder a proven instrument to assist the regions in surmounting their structural problems. The GRW is largely coordinated within a framework designed and agreed on by the Federal Government and the Länder, although the latter are solely responsible for implementing the Joint Task measures and programmes. In accordance with Article 91a of the Basic Law for the Federal Republic of Germany (Grundgesetz), GRW are to be financed equally by the Federal Government and the Länder.

Within the general funding programmes for regionally significant policy areas, the GRW is a specialised instrument for promoting the regional economy. GRW funding policies provide targeted support for regions experiencing structural challenges, helping them overcome their locational disadvantages and catch up with the general economic development. In this way, the policies play a role in reducing regional differences in development.

The bulk of GRW funding supports regional investment in order to stimulate employment and incomes in these regions (creating and safeguarding jobs). This process involves direct funding towards the investment costs of private enterprises and local level infrastructural projects with strong ties to industry as well as non-investment measures (non-investment business activities, cooperation networks and cluster management).

Commercial Sector Funding

Under the GRW programme, commercial sector funding is directed to strengthening the local level economy in regions experiencing structural challenges. The funding thus helps to facilitate the structural changes needed for growth and directly improves the income situation in the regions concerned.

Infrastructural Development

Developing an effective local level infrastructure directly serving industry creates the right basis to attract companies and strengthens the competitiveness of regions suffering from structural weaknesses. The infrastructural measures eligible for funding and the criteria for funding can be found in the GRW Coordination Framework (Koordinierungsrahmen der GRW) under “industry-related infrastructure projects” on page 23, Part II B. To apply for such funding, the application form has to be completed, signed and submitted.

Networks / Regional Management

Promoting cooperation networks / clusters brings together sector-specific interests, fuels synergies and enhances the competitive edge of local industries in Berlin as well as the city as an economic location on both national and international markets.
In the process of supporting local level regional management, alliances are forged which network local stakeholders and allow new regional projects to be generated.

Measures to Support the Economy

The programme of measures to support the economy (“Wirtschaftsdienliche Maßnahmen” (WdM)) is designed to help strengthen the regional economy on the level of Berlin’s boroughs and, directly or indirectly, positively stimulate employment. The projects within this programme are designed to focus in particular on disadvantaged districts. The funding here is directed to temporary practical measures and projects which help to boost Berlin’s economic strength on the borough level, as well as promoting those projects included in the Action Plan of the particular borough’s Alliance for the Economy and Employment (Bündnis für Wirtschaft und Arbeit).