EXHIBIT (d)

This description of Landwirtschaftliche Rentenbank and the Federal Republic of Germany is dated May 8, 2026, and appears as Exhibit (d) to the Annual Report on Form 18-K of Landwirtschaftliche Rentenbank for the fiscal year ended December 31, 2025.

TABLE OF CONTENTS

THIS DOCUMENT (OTHERWISE AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT FILED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED) DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF LANDWIRTSCHAFTLICHE RENTENBANK. THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless explicitly stated otherwise, financial information relating to Landwirtschaftliche Rentenbank presented herein has been prepared in accordance with German GAAP (“German Commercial Code” or “HGB”). Amounts in tables may not add up due to rounding differences.

In this description, references to “€”, “euro” or “EUR” are to the single currency which was introduced as of January 1, 1999, at the start of the third stage of European economic and monetary union. In this description, references to “U.S. dollars” or “$” are to United States dollars, references to “JPY” are to Japanese Yen, and references to “A$” or “AUD” are to Australian dollars.

On May 7, 2026, the euro foreign exchange reference rate as published by the European Central Bank was EUR 1.00 = U.S. dollar 1.177 (EUR 0.8496 per U.S. dollar).

In this description, references to the “Federal Republic” and “Germany” are to the Federal Republic of Germany and references to the “Federal Government” are to the government of the Federal Republic of Germany. The terms “Rentenbank”, the “Bank”, “we” or “us” refer to Landwirtschaftliche Rentenbank.

FORWARD-LOOKING STATEMENTS

This description contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the industry in which we operate, management’s beliefs and assumptions made by management. Such statements include, in particular, statements about our plans, strategies and prospects. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, variations of such words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements after they are made, whether as a result of new information, future events or otherwise.

RECENT DEVELOPMENTS

LANDWIRTSCHAFTLICHE RENTENBANK

The financial figures in this section are based on preliminary, unaudited results for Rentenbank’s three months ended March 31, 2026. Rentenbank expects its final, audited financial statements for 2026 to be announced at a press conference and published in April 2027.

Rentenbank granted new promotional loans totaling EUR 2.4 billion in the first quarter. During this period, Rentenbank raised EUR 5.1 billion in medium and long-term funds in the capital market.

THE FEDERAL REPUBLIC OF GERMANY

Overview of Key Economic Figures

The following economic information regarding the Federal Republic of Germany is derived from the public official documents cited below.

Gross Domestic Product (GDP)

Gross Domestic Product

(adjusted for price, seasonal and calendar effects)⁽¹⁾

Germany’s gross domestic product (“GDP”) grew by 0.3% in the first quarter of 2026 compared with the fourth quarter of 2025 after adjusting for price, seasonal and calendar effects, following the increase at the end of 2025 (0.2% in the fourth quarter of 2025 compared with the third quarter of 2025). This was mainly due to an increase in both household and government final consumption expenditure as well as – according to provisional results available as of April 30, 2026 – growth in exports.

Compared to the first quarter of 2025, price-adjusted GDP in the first quarter of 2026 increased by 0.5%. The price and calendar adjusted GDP was 0.3% higher than in the same quarter of the previous year.

In addition to calculating data for the first quarter of 2026, the Federal Statistical Office, in line with its usual practice, also reviewed the results published earlier for 2025 and included new statistical information in the calculation of the results. This resulted in a downward revision of the rate of change of price-adjusted GDP by 0.1 percentage points for the fourth quarter of 2025. The results remained unchanged in the remaining quarters of the previous year. For the whole year of 2025, the most recent calculations resulted in a 0.3% increase in price and calendar adjusted GDP instead of the previous 0.4%.

Source: Federal Statistical Office, Gross domestic product in the 1^st quarter of 2026 up 0.3% on the previous quarter, press release of April 30, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_153_811.html?nn=2112).

Inflation Rate

Inflation Rate

(based on overall consumer price index)

The inflation rate in Germany is expected to be +2.9% in April 2026. It is measured as the change in the consumer price index (CPI) compared with the same month a year earlier. Based on preliminary results as of April 29, 2026, the Federal Statistical Office (Destatis) also reports that consumer prices increased by 0.6% on March 2026. The inflation rate excluding food and energy, often referred to as core inflation, is expected to stand at +2.3% in April 2026. Energy prices are expected to be up 10.1% on the same month of the previous year. This is the largest increase in energy prices since February 2023 (+19.1% on February 2022).

The inflation rate in Germany amounted to 2.7% in March 2026, after 1.9% in February 2026, 2.1% in January 2026 and 1.8% in December 2025. In March 2026, the most important driver of inflation was the increase in energy and service prices, which was offset in part by a lower than average increase in food prices. The inflation rate excluding food and energy, often referred to as core inflation, was 2.5% in March 2026, unchanged since January and February of that year.

The total prices of energy products were 7.2% higher in March 2026 than in March 2025. This was the first year-on-year increase in energy prices since December 2023. In February 2026, prices had been down 1.9% year on year. Motor fuel prices in March 2026 were up 20.0% on March 2025. The price of heating oil also registered a sharp increase, rising by 44.4%. These marked price increases were largely due to the conflict in the Middle East and the ensuing price developments on the crude oil market. Despite the increase in the price of heating oil, household energy on the whole was 1.2% less expensive in March 2026 than a year earlier (February 2026: -3.5%). Year on year, lower prices were recorded for electricity (-4.5%), natural gas including operating costs (-2.9%) and district heating (-1.2%), for example. This was due, in part, to measures implemented by the Federal Government since the start of the year (including reduced transmission network charges and the abolition of the gas storage neutrality charge).

Food price increases decelerated in March 2026 and were significantly lower than the overall rate of inflation, rising by 0.9% year-on-year after a 1.1% increase in February. The increase in prices from March 2025 to March 2026 was driven in particular by price increases for eggs (+14.8%), sugar, jam, honey and other confectionery (+6.1%, including chocolate: +9.6%), fruit (+4.7%), fresh vegetables (+3.8%) and meat and meat products (+3.6%). By contrast, price decreases were observed particularly for edible fats and oils (-17.6%, including butter: -29.1%; olive oil: -11.8%). In addition, lower prices were recorded for dairy products (-5.4%).

Overall goods prices were up by 2.3% year-on-year. Non-durable consumer goods increased by 3.4%, while durable goods increased by 0.5%. Aside from the rise in food prices by 0.9% and energy products by 7.2%, other products were also more expensive, in particular non-alcoholic beverages (+4.3%, including coffee, tea and cocoa: +12.1%) and tobacco products (+6.1%). By contrast, lower prices were recorded, for example, for major household appliances (-2.8%) and consumer electronics (-5.6%).

Service prices continued their upward trend, increasing by 3.2% year-on-year. Compared with goods, the price increases for services have been higher than overall inflation since January 2024. Year on year, particularly sharp price increases were registered for social protection services (+7.0%) and combined passenger transport services (+6.2%), in the latter case due, in particular, to the increase in price of the Germany Ticket at the start of the year. Compared with the previous year, substantial price increases were also observed in March 2026 for the maintenance and repair of vehicles (+4.8%), water supply and miscellaneous services relating to dwellings (+3.5%), catering services in restaurants, cafés and the like (+3.3%) and insurance services (+3.2%) Net rents exclusive of heating expenses (+1.9% on the same month of the previous year) continued to be a significant factor contributing to the overall development of prices in March 2026. Only a few services cost less than in the same month a year earlier, including telecommunications services (-0.1%).

Compared to February 2026, the consumer price index increased by 1.1% in March 2026. As a result of the conflict in the Middle East, energy prices rose significantly (+7.7%) compared with the previous month. In particular, energy prices increased by 7.7% compared to February 2026 as a result of the conflict in the Middle East. This increase was driven in particular by increases in the prices of motor fuels (+15.6%, including diesel fuel: +22.6%) and heating oil (+43.2%). In addition, higher prices were registered for international flights (+10.0%), package holidays and clothing (+4.4% in each case), partly due to seasonal factors. Food prices showed very little change (+0.1%). Fresh fruit, for example, was more expensive (+1.3%), but fresh vegetables, in particular, were less expensive (-2.8%, including cucumbers: -19.1%, butterhead or iceberg lettuce: -5.1%).

Sources: Federal Statistical Office, Short-term indicators: Price indices at a glance (consumer prices, retail prices, producer prices, selling prices in wholesale trade, import prices, export prices). Tables with values and rates of change (https://www.destatis.de/EN/Themes/Economy/Short-Term-Indicators/Prices/pre110.html); Federal Statistical Office, Inflation rate of +2.9% expected in April 2026, press release of April 29, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_149_611.html?nn=2112).

Unemployment Rate

Unemployment Rate

(percent of unemployed persons in the total labor force according to the
International Labour Organization (ILO) definition) (1)

Approximately 42.3 million persons resident in Germany were in employment in March 2026. According to provisional calculations of the Federal Statistical Office, the seasonally adjusted number of persons in employment decreased by 25,000, or 0.1%, compared to the previous month. In the period from May 2025 to February 2026, employment decreased by an average of 16,000 people month on month.

Compared to March 2025, the number of employed persons in March 2026 decreased by 174,000 (-0.4%). The downward trend in the year-on-year labor market figures, which has been observed since August 2025, therefore continued. In both January and February 2026, the year-on-year rate of change stood at -0.3%.

In March 2026, the number of unemployed persons increased by approximately 210,000, or 12.9%, compared to March 2025. Adjusted for seasonal and irregular effects, the number of unemployed persons in March 2026 stood at 1.8 million, reflecting a decrease of 6,000 people or 0.4% compared to February 2026. Between February 2026 and March 2026, the adjusted unemployment rate was unchanged at 4.0%.

Sources: Federal Statistical Office, Employment in March 2026 down on the previous month after seasonal adjustment, press release of April 30, 2026 (https://www.destatis.de/EN/Press/2026/04/PE26_152_132.html?nn=2112); Federal Statistical Office, Genesis-Online Datenbank, Result 13231-0001, Unemployed persons, persons in employment, economically active population, unemployment rate: Germany, months, original and adjusted data, accessed on April 30, 2026 (https://www-genesis.destatis.de/genesis/online?sequenz=tabelleErgebnis&selectionname=13231-0001&zeitscheiben=2&leerzeilen=false&language=en#abreadcrumb).

Current Account and Foreign Trade

Current Account and Foreign Trade

Source: Deutsche Bundesbank, Major items of the German balance of payments, April 10, 2026 (https://www.bundesbank.de/resource/blob/810962/2ac374ac7140be331361f568a767c87c/472B63F073F071307366337C94F8C870/aw1e1-1a-data.pdf).

Other Recent Developments

Monetary Policy

On April 30, 2026, the Governing Council of the European Central Bank (“ECB”) again decided to keep each of the three key ECB interest rates – the deposit facility rate, the main refinancing operations rate and the marginal lending facility rate – unchanged. The Governing Council has maintained the ECB’s key interest rates unchanged since its monetary policy decision of June 5, 2025, which reduced each of these rates by 25 basis points. As of the date of this amendment, the deposit facility, main refinancing operations and marginal lending facility rates are 2.00%, 2.15% and 2.40%, respectively.

In announcing its decision, the Governing Council noted that the euro area had entered the current period of surging energy prices with inflation at around the ECB’s two per cent target, and that the economy has shown resilience over recent quarters. The Governing Council stated its view that longer-term inflation expectations remain well anchored, although inflation expectations over shorter horizons have moved up significantly.

The Governing Council reported that the asset purchase programme (APP) and pandemic emergency purchase programme (PEPP) portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.

Sources: European Central Bank, Monetary policy decisions, press release of April 30, 2026 (https:// https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.mp260430~81b7179e6f.en.html).

War in Middle East

On February 28, 2026 the United States and Israel commenced military actions against Iran. Israel also commenced military actions against Hezbollah in Lebanon. On April 8, 2026, Iran, the United States and Israel began a temporary ceasefire; on April 16, 2026, the United States announced that Israel and Lebanon had also agreed to a temporary ceasefire.

Despite the ceasefire, the United States continues a naval blockade of Iranian ports, and Iran continues to restrict the passage of commercial shipping through the Strait of Hormuz. Diplomatic efforts, including indirect and direct negotiations between Iran and the United States in Islamabad, Pakistan, have not yet produced a permanent resolution of hostilities.

The military and naval actions in Iran, the Persian Gulf and the surrounding Gulf states have driven higher energy prices in Germany and other parts of the world. In addition, international supply chains have experienced significant disruption. The direct and indirect effects of these developments have the potential to increase inflation significantly and to adversely affect GDP growth in Germany and other major economies.

As of the date of this annual report, it is not possible to predict the ultimate resolution of the hostilities in the Middle East or their precise effect on the global and German economies.

Sources: "U.S., Iran and Israel Agree to Cease-Fire", The New York Times, April 7, 2026 (https://www.nytimes.com/live/2026/04/07/world/iran-war-trump-news?smid=url-share#f1657559-8135-50c9-ad7f-63636e6a5106); “Trump says Israel and Lebanon agree to temporary ceasefire”, Al Jazeera, April 16, 2026 (https://www.aljazeera.com/news/2026/4/16/trump-says-israel-and-lebanon-agree-to-temporary-ceasefire); “US begins blockade of Iran's ports, Tehran threatens retaliation”, Reuters, April 13, 2026 (updated April 14, 2026) (https://www.reuters.com/world/middle-east/us-blockade-iran-after-talks-fail-yield-a-deal-2026-04-13/).

LANDWIRTSCHAFTLICHE RENTENBANK

GENERAL

Overview

Rentenbank was founded in 1949 as the development bank for the agriculture, forestry, fishing and food industries in Germany. We are an institution established under public law (rechtsfähige Anstalt des öffentlichen Rechts) and have our headquarters in Frankfurt am Main. We do not have any branches. Rentenbank is registered with the Commercial Register of the Local Court of Frankfurt am Main under HRA 30636.

Our activities and governance structure are regulated by our governing law and our statutes. Under our governing law, we are charged with the public task of promoting the agriculture industry (including forestry, horticulture and fisheries) and the development of rural areas through the extension of credit for:

Rentenbank’s governing law (Gesetz über die Landwirtschaftliche Rentenbank; the “Rentenbank Law”) was amended by the German Federal Development Banks New Structuring Law (Förderbankenneustrukturierungsgesetz or the “Restructuring Law”) effective as of August 22, 2003, principally in order to clarify its permissible activities in connection with the understanding reached on March 1, 2002, between the Federal Government and the Commission of the European Union on the treatment of state guarantees for federal development banks. See “— Relationship with the Federal Government — Understanding with the European Commission”.

In 2009, the Rentenbank Law was amended twice. Effective as of March 26, 2009 Article 4 of the Act on the further development of the German covered bond law dated March 20, 2009 (Gesetz zur Fortentwicklung des Pfandbriefrechts vom 20. März 2009) deleted in particular all provisions relating to a potential insolvency of Rentenbank since insolvency proceedings are inconsistent with the principles of Anstaltslast. See “— Relationship with the Federal Government — Institutional Liability (Anstaltslast)”.

Furthermore, the Rentenbank Law was amended by Article 8 of the Act on the Implementation of Supervisory Provisions of the Payment Services Directive (Gesetz zur Umsetzung der aufsichtsrechtlichen Vorschriften der Zahlungsdiensterichtlinie) dated June 25, 2009. Effective as of October 31, 2009, the language of the Rentenbank Law was adapted to the language of the directive but did not have any impact on our legal status or permissible activities.

Moreover, the Rentenbank Law was amended by Article 4 of the statute implementing the Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms and adapting supervisory laws to Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (Gesetz zur Umsetzung der Richtlinie 2013/36/EU über den Zugang zur Tätigkeit von Kreditinstituten und die Beaufsichtigung von Kreditinstituten und Wertpapierfirmen und zur Anpassung des Aufsichtsrechts an die Verordnung (EU) Nr. 575/2013 über die Aufsichtsanforderungen an Kreditinstitute und Wertpapierfirmen; the “CRD IV Umsetzungsgesetz”) dated August 28, 2013. In connection with the CRD IV Umsetzungsgesetz, the Rentenbank Law was amended to include a new Section 1a, pursuant to which, as of January 1, 2014, the Federal Republic of Germany guarantees all existing and future obligations of Rentenbank in respect of money borrowed, bonds and notes issued and derivative transactions entered into by Rentenbank, as well as obligations of third parties that are expressly guaranteed by Rentenbank (the “Guarantee of the Federal Republic”). See also “— Relationship with the Federal Government — Guarantee of the Federal Republic”.

Effective as of November 6, 2015, Section 16 of the Rentenbank Law was amended by Article 3 of the Act dated November 2, 2015 in order to clarify that Rentenbank shall not be subject to insolvency proceedings.

Finally, the Rentenbank Law was subject to further, largely technical amendments. In 2018, a minor change was made to align statutory references with revised payment services legislation (Gesetz zur Umsetzung der Zweiten Zahlungsdiensterichtlinie). In 2023, additional amendments were introduced by the Credit Secondary Market Promotion Act (Kreditzweitmarktförderungsgesetz), primarily updating cross-references and supervisory provisions, including references to the German covered bond law.

Rentenbank’s statutes (Satzung; “Rentenbank’s Statutes”) were amended and restated, effective as of March 27, 2014, principally to reflect changes in the German Banking Act (Gesetz über das Kreditwesen; “KWG”) based on the CRD IV Umsetzungsgesetz.

Due to the establishment of the nomination committee and remuneration committee, Rentenbank’s Statutes were amended and restated, effective as of December 15, 2018.

We extend credit to German and other public and private sector banks in the European Union (“EU”) both by means of traditional loans and by purchasing the debt securities of such banks. We also issue loans to financial institutions for the financing of rural development and infrastructure projects as well as German Federal States (Bundesländer; “German Federal States”), German rural districts, German municipalities and public law special purpose corporations. Finally, we extend credit to specific agencies of the Federal Republic and to banks in the United Kingdom, Norway, Switzerland, Australia and Canada and supranational organizations.

As an instrumentality serving public policy objectives of the Federal Government, we are not subject to corporate income and trade tax and do not seek to maximize profits.

Rentenbank’s founding capital was raised through a public charge imposed on agricultural land in Germany from 1949 to 1958. This charge was established by a federal law, the Law on the Rentenbank Land Charge (Gesetz über die Rentenbankgrundschuld), dated May 11, 1949. The law itself remained formally in force until it was officially repealed in 2010.

At December 31, 2025, Rentenbank had total assets of €90.5 billion.

Starting with the fiscal year ending December 31, 2017, Rentenbank has decided no longer to prepare audited, consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU, as it is not legally required to do so. Rentenbank will continue to prepare audited annual, unconsolidated financial statements in accordance with German GAAP (German Commercial Code or HGB) included in Exhibit (e) to this annual report.

Our registered office is located at Frankfurt am Main, Germany, and our telephone number is +49-69-2107-0. The headquarters and business address of Rentenbank is Theodor-Heuss-Allee 80, 60486 Frankfurt am Main as Rentenbank´s office building at Hochstrasse 2, 60313 Frankfurt am Main is being renovated.

Relationship with the Federal Government

Rentenbank has no shareholders and Germany’s federal legislature exercises ultimate control over Rentenbank through legislative action. For example, the Rentenbank Law specifies the scope of our activities. The Federal Government exercises supervision of Rentenbank through the Federal Ministry of Agriculture, Food and Regional Identity which makes its decisions in concert with the Federal Ministry of Finance. We may only be liquidated pursuant to legislative action by the federal legislature.

Guarantee of the Federal Republic

The Rentenbank Law was amended with effect from January 1, 2014 to provide expressly that the Federal Republic guarantees all existing and future obligations of Rentenbank in respect of money borrowed, bonds and notes issued and derivative transactions entered into by Rentenbank, as well as obligations of third parties that are expressly guaranteed by Rentenbank (Rentenbank Law, Section 1a). Under the Guarantee of the Federal Republic, if Rentenbank fails to make any payment of principal or interest or any other amount required to be paid with respect to securities issued by Rentenbank, or if Rentenbank fails to make any payment required to be made under Rentenbank’s guarantee when that payment is due and payable, the Federal Republic will be liable at all times for that payment as and when it becomes due and payable. The Federal Republic’s obligation under the Guarantee of the Federal Republic will rank equally, without any preference, with all of its other present and future unsecured and unsubordinated indebtedness. Holders of securities issued by Rentenbank or issued under Rentenbank’s guarantee will be able to enforce this obligation directly against the Federal Republic without first having to take legal action against Rentenbank. The Guarantee of the Federal Republic is strictly a matter of statutory law and is not evidenced by any contract or instrument. It may be subject to defenses available to Rentenbank with respect to the obligations covered.

The Guarantee of the Federal Republic does not affect the obligations of the Federal Republic towards Rentenbank pursuant to the existing institutional liability (Anstaltslast).

Institutional Liability (Anstaltslast)

Rentenbank benefits from the Anstaltslast, or institutional liability, of the Federal Republic. This means that the Federal Republic will:

This duty under public law exists solely between the Federal Republic and Rentenbank and not between the Federal Republic and any third party. The Federal Republic would not, under Anstaltslast, be permitted to allow us to default on an obligation; the Federal Republic would be required on its own authority to take steps to enable us to perform our obligation when due. Under German law, we would be required to enforce our rights against the Federal Republic in the event we needed to do so in order to meet our obligations to third parties, including holders of any of our securities. Accordingly, while Anstaltslast does not constitute a formal guarantee of our obligations by the Federal Republic, and our creditors do not have a direct claim against the Federal Republic under Anstaltslast, the effect of Anstaltslast is that our obligations, including our publicly issued debt securities, or our guarantee of debt securities should a substitute obligor be substituted for Rentenbank, are fully backed by the full faith and credit of the Federal Republic. The obligation of the Federal Republic under Anstaltslast would constitute a legally established charge on public funds that would be payable without the need for appropriation or any action by the federal parliament.

Understanding with the European Commission

On March 1, 2002, representatives of the Federal Government and the Commission of the European Union reached an understanding on the treatment of state guarantees for federal development banks such as Rentenbank for purposes of the EU state aid rules. Pursuant to the understanding, the use of advantages for special credit institutions resulting from Anstaltslast and other state guarantees relevant under the state aid rules is allowed for the performance of promotional tasks at the request of the state in promotional areas like financing of small and medium enterprises, infrastructure, environment-friendly investment, housing as well as cooperation with developing countries. Activities, which do not fall under the areas in line with the state aid rules, must either be discontinued by the special credit institutions or be spun-off to legally independent subsidiaries without state support.

With the adoption of the Restructuring Law, the description of our permissible activities in the Rentenbank Law was conformed to the language in respect of which the Federal Republic and the Commission of the European Union reached an understanding on March 1, 2002.

Based on the foregoing, Rentenbank does not currently expect that it will be required to either discontinue or separately incorporate any material portion of its present business activities as a result of the understanding.

Supervision by the Federal Government

The Rentenbank Law prescribes our internal governance structure, our capital structure, the limited scope and nature of our lending activities and provides for supervision of us by the Federal Republic. Although our day-to-day operations are managed independently by our Management Board with supervision by our Supervisory Board, the Federal Republic exercises supervision through the Federal Ministry of Agriculture, Food and Regional Identity (“Supervising Authority”) which exercises its supervision in concert with the Federal Ministry of Finance.

The statutory function of the Supervising Authority is to ensure that the operations of Rentenbank are consistent with the public interest in particular in the promotion of agriculture and rural areas, and are in compliance with German law. The Supervising Authority may request information regarding our operational matters, inspect our books and records and participate in all Supervisory Board meetings and General Meetings with the authority to issue motions and to comment on topics at such meetings. In addition, the Supervising Authority has the authority to request a meeting of any of our three governing bodies and is authorized to prevent the implementation of any resolution that is against public interest or violates German law.

We are also subject to banking supervision and regulation by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht; “BaFin”) and the German Central Bank (“Deutsche Bundesbank”) under the KWG. See “Supervision and Regulation” and “The Federal Republic of Germany — Financial Supervision Authority”.

From November 4, 2014, until June 26, 2019, Rentenbank was among the banks considered significant under the Single Supervisory Mechanism (“SSM”), and was thus subject to European Central Bank (“ECB”) supervision.

On June 27, 2019, new EU rules revising the Capital Requirements Regulation (“CRR”) and the Capital Requirements Directive (“CRD”) became effective (“CRR II” and “CRD V”). The new rules provide for an explicit exemption of Rentenbank from the scope of the CRD. Consequently, Rentenbank is not part of the SSM anymore and no longer subject to supervision by ECB. Instead, BaFin and Deutsche Bundesbank have taken over supervisory responsibility. See also “— Supervision and Regulation — General / Regulatory changes in the banking sector on EU level”.

Sustainability

Sustainable agriculture is the indispensable prerequisite and essential basis for a sustainable society. Agriculture plays a key role in climate and environmental protection because it is a critical part of both the problem and the solution. As a promotional bank, it is our duty to help the agriculture industry further reduce harmful effects on the climate and the environment and extend its role as a producer of ecosystem conservation services and sustainable raw materials.

Our Mission Statement expresses our self-concept and our values. Together with our Code of Conduct and our risk culture, it forms the basis for ethically correct conduct at Rentenbank. The Mission Statement and Code of Conduct can be viewed on Rentenbank’s Sustainability Portal.

We are committed to the Sustainable Development Goals (SDGs) of the United Nations and the goals of the Paris Climate Agreement. Based on our Sustainability Guidelines, we set and update goals and define appropriate measures, indicators, and responsibilities to ensure and monitor the attainment of those goals on an annual basis. Rentenbank’s sustainability activities are coordinated by its sustainability managers.

By coordinating intraorganizational workstreams, the sustainability managers ensure that the necessary framework conditions and regulations are met and that current trends and developments are taken into account at Rentenbank. They also assist the responsible units with operational implementation.

Sustainability topics are handled by cross-divisional and cross-departmental work groups, which address specific topics such as the improvement of sustainability performance in banking operations and the development of sustainability-related financing products. The work groups are also tasked with the implementation of regulatory requirements and the execution of the sustainability programme.

Strategically important sustainability issues are discussed in the Sustainability Board, whose task is to oversee and coordinate bankwide sustainability activities. The Sustainability Board operates as a bankwide body of experts with the participation of all relevant executive officers and the Management Board. Moreover, the sustainability managers inform the participants about newly arising sustainability-related issues at the meetings of the Sustainability Board. Important decisions related to Rentenbank’s sustainability performance and strategic orientation are presented to the Management Board in the form of draft resolutions for adoption. The Management Board bears overall responsibility for Rentenbank’s sustainability activities.

Starting in 2025, Rentenbank voluntarily publishes an annual standalone sustainability report that takes the European Sustainability Reporting Standards (ESRS) as guideline. The report is based on a materiality assessment that considers both how sustainability issues may impact Rentenbank’s financial performance (outside-in perspective) as well as how Rentenbank’s activities affect society and the environment (inside-out perspective). The sustainability report can be accessed on Rentenbank’s website.

Areas of activity

Rentenbank’s business and sustainability strategies are closely linked. While ESG (environment, social and governance) criteria are being integrated into its core business, Rentenbank is focused on the following areas of activity: sustainable corporate governance, sustainable banking, sustainable human resources management, and sustainable banking operations.

Rentenbank’s Sustainability Guidelines are structured along these areas of activity. They were introduced in 2021 and reflect Rentenbank’s understanding and level of ambition relative to our central goal of acting as a sustainable enterprise and transformation bank in the field of agriculture in Germany.

Under our sustainability program, we define annually updated objectives and formulate the associated measures, indicators, and responsibilities to ensure and monitor the achievement of these objectives. Each objective is connected to at least one of the sustainability issues that were deemed material in the materiality assessment. The Management Board and the Sustainability Board are regularly informed of the status of implementation.

Beyond its internal initiatives, Rentenbank is committed to national and international initiatives which contribute to sustainable development. Therefore, Rentenbank subscribes to the United Nations Universal Declaration of Human Rights. Within its sphere of influence, Rentenbank respects and protects the universal human rights and the core labour standards of the International Labour Organization (ILO) (cf. ILO Declaration on Fundamental Principles and Rights at Work). As a member of the International Capital Markets Association, Rentenbank conforms with ICMA Green Bond Principles and is making a contribution to further developing the market for sustainable issuances. Rentenbank is a signatory of PCAF (Partnership for Carbon Accounting Financials). The comprehensive compliance with legal and internal requirements for the Prevention of Fraud and Corruption and Prevention of Money laundering is a mandatory prerequisite for Rentenbank’s successful operations.

BUSINESS

Our principal business is providing loans and other types of financing for the German agricultural and forestry sectors, viticulture and horticulture sectors as well as in aquaculture and fisheries. Funds are also provided for projects in the food industry and other upstream and downstream companies as well as investments in renewable energies and projects for rural development. The principal purpose of loans granted is the promotion of agriculture, agribusiness and rural development. We do so primarily by extending credit to German private and public sector banks, both by means of traditional loans and by purchasing the debt securities of such banks. These banks then lend the proceeds to eligible borrowers. According to the Rentenbank Law, our lending activity should generally be conducted through or in conjunction with other financial institutions. Accordingly, other than direct lending to certain affiliates and companies, German regional state governments and specific agencies of the Federal Republic, our policy is to lend almost exclusively to financial institutions.

Throughout this description and in our financial statements included in Exhibit (e) to this annual report, we classify short-term loans as those due within one year from origination, medium-term loans as those due from between one year and five years from origination, and long-term loans as those due after five years from origination.

We provide credit to financial institutions to be loaned to borrowers engaged in the following activities:

Although we provide credit to banks which make loans to ultimate borrowers engaged in these activities, we do not separately record in our financial statements included in Exhibit (e) to this annual report the loan amounts that are extended by such banks for each of the above named activities.

Furthermore, Rentenbank carries out promotional activities on behalf of the German federal government (mandate business). In addition, Rentenbank supports innovation and start-ups. We attach great importance to the promotion of innovation and new technologies for a sustainable and therefore viable agriculture and food industry. We support the entire innovation process from practical testing to market introduction and scaling of especially innovative methods and products. Furthermore, Rentenbank invests as a limited partner in venture capital funds which focus primarily on AgTech and FoodTech, in order to not only close the financial gap, but also to initiate active transformation in the agricultural and food industry. Growth capital is one of the most important drivers for the development of innovation and the establishment of new technologies and business models. .

Loans to Banks and Customers

We extend credit by making traditional loans and by purchasing the debt securities of German or other EU-banks, German Federal States, German rural districts or German municipalities. Our traditional loan portfolio (as described below) consists primarily of special promotional loans and accounted for 62.8% of our loan portfolio at December 31, 2025. For a further description of our traditional lending activities, see “— Loan Portfolio” below.

To bolster innovation in Germany, Rentenbank has been investing in venture capital since February 2022. Rentenbank invests in venture capital funds focused on the areas of agtech and foodtech.

Loan Portfolio

The following table shows the special promotional loans and registered bonds and promissory notes (Schuldscheine) portion of our loan portfolio at December 31, 2025 and 2024.

The following table provides a breakdown of our loan portfolio according to maturity at December 31, 2025 and 2024.

Our portfolio of traditional loans consists primarily of special promotional loans and medium- and long-term registered bonds and promissory notes. As noted above, we classify short-term loans as those due within one year from origination, medium-term loans as those due from between one year and five years from origination, and long-term loans as those due after five years from origination. Our loan portfolio at December 31, 2025, totaled €60.6 billion, a decrease of 2.7% from €62.3 billion at December 31, 2024. At December 31, 2025, this loan portfolio represented 67.0% of our total assets.

Our special promotional loans accounted for 62.8% of our loan portfolio at the end of 2025 compared with 63.0% of our loan portfolio at the end of 2024. They are composed almost exclusively of secured loans to German public sector and private sector banks. These medium and long-term loans are made to banks which loan the proceeds to ultimate borrowers who meet the qualifications under one of our special promotional loans designed to further agriculture and rural development-related policy goals. The interest rate on these loans is generally close to our own cost of funds and the terms and conditions of the corresponding loan made to the ultimate borrower are generally more favorable to the ultimate borrower than would otherwise be commercially obtainable.

Our registered bonds and promissory notes accounted for 37.2% of our loan portfolio at December 31, 2025, compared with 37.0% of our loan portfolio at December 31, 2024. It is mainly composed of secured and unsecured loans to German public sector and private sector banks as well as to banks in the EU. Landesförderinstitute, promotional institutes of the federal states established by the different German Federal States, Sparkassen, a type of public sector savings banks, and Landesbanken, public sector universal banks, are the principal German public sector banks to which we lend.

For information on our review process for approving borrowing banks, see “— Eligibility of Financial Institutions” below.

Registered bonds and promissory notes

Borrowing terms on registered bonds and promissory notes are negotiated with each bank and reflect, among other things, an evaluation of the borrower’s creditworthiness and prevailing market conditions. In our risk evaluation, we consider, among other things, the term of the loan, the creditworthiness of the borrowing bank, our existing credit exposure to the particular borrowing bank and, if applicable, the country risk. We conduct an annual review of roughly 800 private and public sector bank borrowers to ensure that these borrowers continue to meet minimum credit standards. Under the terms of our loans, we generally rely on the creditworthiness of the intermediate financial institution. See “–– Credit Analysis”.

At December 31, 2025, 9.7% of our notional loan portfolio amount was unsecured, as compared with 9.0% of our notional loan portfolio at December 31, 2024. Unsecured loans to German and other private sector banks in the EU as well as the United Kingdom, Norway, Switzerland, Australia and Canada are made only after a thorough review of the borrowing bank’s creditworthiness.

We also purchase registered bonds and promissory notes issued by private and public sector banks located in other EU countries as well as in the United Kingdom, Norway, Switzerland, Canada and Australia. Although there is no legal restriction on the amount of funds we may lend into any one country, as a matter of internal policy we have set aggregate lending limits for each country into which we lend. Finally, we purchase registered bonds and promissory notes issued by German Federal States, German rural districts or German municipalities.

Short-Term registered bonds and promissory notes

Short-term loans are granted to both financial institutions and non-financial institutions by the purchase of short-term registered bonds and promissory notes. The bulk of our lending through registered bonds and promissory notes consists of loans made to banks and other financial institutions in the wholesale markets.

Special Promotional Loans

Special promotional loans are extended under programmes designed to further specific policy goals defined by our Supervisory Board. In addition, we administer other loan programmes on behalf of the Federal Republic and some German Federal States. Borrowers must meet the defined requirements to borrow under one of these programmes. Unlike our registered bonds and promissory notes, under these special promotional loan programmes, we review the ultimate borrower’s eligibility. The final credit decision is made by the local bank (Hausbank) of the ultimate borrower.

Through the following special promotional loans, we reduce the interest rates of our loans or grant additional subsidies to specific groups in order to further our promotional objectives. The structure of the special promotional loan programmes allows us the promotion along the entire food value chain. Loans are generally limited to €10 million per business per year. Included are loans issued by some promotional institutions of the German Federal States which use liquidity facilities for specific promotional purposes in their respective federal state. The global loans provided are used for the comprehensive refinancing of loan programmes of the individual German Federal States intended for the promotion of the agricultural business and rural areas. These programmes are (1) set up by the promotional institutions of the German Federal States and primarily include the financing of local structural measures, residential construction and wastewater plants or (2) are promotional loan programmes with added value (e.g. lower interest rate) on behalf of the promotional institution. The promotional institutions of the German Federal States are either guaranteed by law by the respective federal state or receive a loan guarantee explicitly issued.

Although we review the applications and the eligibility of the ultimate borrower, special promotional loans are disbursed through local banks or other financial institutions that identify potentially qualified borrowers under one of our loan programmes. Participating financial intermediaries earn a fixed interest margin set by the German risk adjusted pricing model (Risikogerechtes Zinssystem; “RGZS”), currently 1.00% p.a. up to 7.40% p.a. according to the credit rating of the ultimate borrower and/or the value of collateral provided, on loans extended these loan programmes. Special promotional loans have maturities of four to more than 20 years and, in the case of loans of more than ten years, usually include an adjustable interest rate mechanism whereby we reset the interest rate after ten years. Unlike registered bonds and promissory notes, special promotional loans are secured by an assignment of the underlying loan and the right to require a transfer of the collateral in which the lending bank has a security interest.

Eligibility of Financial Institutions

Consistent with our purpose of providing financing to the agricultural sector, the food industry and rural development, we select financial institutions to which we make loans based on their lending activities in these areas. In our review process, we generally exclude institutions which are clearly not involved in these areas, such as consumer finance institutions and investment banks. Of the remaining institutions, we review their annual reports and other documents to check the consistency of their activities with our purposes. If their lending activities are consistent with our purposes, they are approved as potential borrowers, subject to credit approval. For local and regional banks, we assume that these banks are involved in the development of their local rural areas, and they are included as potential borrowers.

Under our special promotional loans, we review the applications of the end borrowers and ensure their loan eligibility based on a review of their stated purpose for using the proceeds of the loan. Once approved, the loan is issued through one of the banks to which we lend. For a further description of our special promotional loans, see “— Special Promotional Loans” above.

Securities Portfolio

In addition to our traditional loan portfolio, we are also active in providing financing through the purchase of debt securities of German and other banks in the EU, the United Kingdom, Switzerland, Canada, Norway and Australia as well as supranational institutions. The guidelines for our securities portfolio are similar to those we use for our loan portfolio. Just as we restrict loans to financial institutions active in the financing of the agriculture, forestry, horticulture, fishing industry and rural development in Germany and EU countries, in the context of our securities business we purchase the debt securities of financial institutions active in the above mentioned areas. Debt securities issued by the EU, banks in Switzerland, the United Kingdom, Canada, Norway and Australia can only be purchased for treasury management purposes or investment of own funds. At December 31, 2025, the securities portfolio accounted for 20.9% of total assets, as compared with 17.6% at December 31, 2024. Of our portfolio of debt securities, at December 31, 2025, 8.5% were issued by public issuers, compared to 5.8% at December 31, 2024.

The following table shows the aggregate carrying amount of our securities portfolio at December 31, 2025 and 2024.

Securities Portfolio

Subsidiaries

At December 31, 2025, we hold interests in two affiliated companies: LR Beteiligungsgesellschaft mbH (“LRB”) and DSV Silo- und Verwaltungsgesellschaft mbH (“DSV”), both located in Frankfurt am Main.

LRB is a holding company that owns equity interests in DSV. Rentenbank owns 100% of LRB’s outstanding capital. At December 31, 2025, LRB had total assets of EUR 93.7 million according to the annual financial statements prepared in accordance with German commercial law. LRB owns 100% of the outstanding capital of DSV. At December 31, 2025, DSV had total assets of EUR 4.0 million, according to the annual financial statements prepared in accordance with German commercial law. DSV only manages own funds to secure pension payments to its former employees and those of Getreide-Import-Gesellschaft mbH, which was merged into DSV retrospectively effective as December 31, 2023.

Activities on Behalf of the Federal Republic and German Federal States (Bundesländer) Governments

Rentenbank Law requires us to allocate at least one-half of our net income, after allocations to the principal reserve and guarantee reserve, to a special purpose fund (Zweckvermögen) that was formed pursuant to the Law on Agricultural Disencumbrances of March 25, 1952 (Gesetz zur Abwicklung der landwirtschaftlichen Entschuldung). We administer this fund as trustee for the Federal Republic. We issue loans or grants from this fund as instructed by the Federal Minister of Agriculture, Food and Regional Identity. To pave the way for innovative ideas to reach the market, we have since July 2021 promoted agriculture-related start-ups in the early financing phase from the special purpose fund. Up to one-half of our remaining net income is allocated to a promotional fund (Förderungsfonds), the disbursement of which is determined by the General Meeting.

We are also enabled to act on behalf of German Federal States and the Federal Republic in administering other sponsored loan programmes. Together with the federal government and the German Federal States, Rentenbank can also set up special promotional loans for agricultural enterprises to provide liquidity or support other promotional purposes that combine favourable refinancing on capital markets of Rentenbank with public funding. This was for example the case due to financial crises and low prices for agricultural products, where state subsidies were used to lower the interest rate for ultimate borrowers.

Besides our special promotional loan programmes for investments in infrastructure of rural municipalities, we also promote rural development by offering global loans to the promotional banks of the German Federal States.

In addition, the Federal Government has commissioned Rentenbank with implementing additional federal programmes: “The Digitalisation and Technology for the Sustainable Forestry Management programme” began on November 2, 2020. The programme aims to preserve forests and make relevant adjustments for climate change. Applications ended 2021. Another federal programme, “The Promotion of Investment and Future Programme for Agriculture” started on January 11, 2021 and ended on December 31, 2024. The aim was to promote more environmentally-friendly techniques for land cultivation in order to protect the climate and improve biodiversity. Both programmes combined grants from the Federal Government with loans from Rentenbank. From 2021 to 2024, we have committed grants of €532.5 million in “The Promotion of Investment and Future Programme for Agriculture”. As the latest example, Rentenbank has been offering a subsidy programme, the “Action Programme Natural Climate Protection” (ANK), on behalf of the German Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN) since July 2024. The purpose of this programme is to promote investments in machinery and equipment that enhance the carbon storage function of soil and increase biodiversity in agricultural areas. In 2025, we have committed grants of €35.4 million for these purposes.

New Business

The following table shows the notional amount of our new business:

Sources of Funds

Our principal sources of funds are:

Rentenbank is an active participant in the interbank market. Borrowings are limited to banks domiciled in countries of the OECD. Maturities range from overnight money to 12 months deposits. Furthermore, we obtain short-term funding by issuance under our EUR 20 billion Commercial Paper Programme (“ECP Programme”). This issuing programme enables us to issue notes on a discounted, compounded or index basis with maturities from 1 day up to 364 days which are mainly placed with international institutional investors.

The participation in open market transactions and the standing facilities within the ESCB gives us access to a range of additional instruments to manage short-term liquidity. We can obtain short-term funds by participating in the main refinancing operation, the longer-term refinancing operation, fine-tuning operations or by borrowing overnight funds under the marginal lending facility. Our access to these funds is limited by the borrowing value of available collateral in our account with Deutsche Bundesbank.

We also obtain funding in the international capital markets, both through various issuing programmes and through stand-alone issuance of various types of unsecured notes and debentures. The issuing programmes include a EUR 70 billion Euro Medium Term Note Programme (the “EMTN Programme”) and an AUD 15 billion Australian Dollar Domestic Medium Term Note Programme (the “AMTN Programme”). We have a shelf registration statement in the United States for debt securities. Issuances of promissory notes and international loans complement our funding instruments.

The international capital markets continue to represent the most important source of financing for us. In the year ended December 31, 2025, we issued the equivalent of €7.6 billion of medium and long-term Euro Medium Term Notes, € 0.6 billion of AUD Medium Term Notes and € 2.6 billion of SEC registered debt securities. We use derivative instruments to hedge our currency and interest rate exposure in connection with such issuances. See “— Risk Management and Derivatives” below.

With respect to the domestic and international capital markets, the following table shows our sources of funds based on the carrying amount during each of the years indicated.

¹        Registered bonds (Namensschuldverschreibungen) issued in the domestic market

²        Bearer bonds (Inhaberschuldverschreibungen) and registered bonds issued and sold pursuant to the EMTN Programme and the AMTN Programme as well as registered bonds issued and sold under the shelf registration statement filed with the SEC

Liabilities to Customers

Our liabilities primarily consist of debt securities, liabilities to banks and liabilities to customers. See “— Sources of Funds” above for a description of our funding activities related to debt securities and our liabilities to banks. 82% of our liabilities to customers consist of registered bonds, international loans and promissory notes that are purchased by insurance companies. The remaining amount of liabilities to customers consists of liabilities to individual German Federal States, as well as other local governments. These liabilities are uncertificated and arise from credit accounts with these governments.

Risk Management and Derivatives

Our risk control department has responsibility for our market price and liquidity risk management system as well for the credit risk including rating methodologies, operational and strategic risk control and is overseen directly by the Management Board. The risk control department applies for and the Management Board determines market, liquidity, credit and non-financial risk limits. All risks are limited and covered within the Capital Adequacy Assessment Process (ICAAP) or the Liquidity Adequacy Assessment Process (ILAAP) in compliance with the regulatory requirements. Daily reports are generated by the risk control unit, which analyzes whether our money market, loan and securities portfolios are within market and liquidity risk limits prescribed by the Management Board. The market risk report analyzes the effect on our money market, liquidity and credit portfolio of a defined parallel shift of the yield curve. With respect to liquidity risk, our daily liquidity deficit, also in severe stress scenarios is never greater than the amount of our eligible collateral with Deutsche Bundesbank. The Credit division applies for, and the Management Board approves, the counterparty credit limits for derivatives. Credit risk, including counterparty credit risk, is monitored on a bank-wide basis as part of our annual review of borrowing customers. See “— Registered bonds and promissory notes”. The front office is responsible for the risk management within existing limits.

We use derivatives exclusively as hedging instruments for existing or expected market price risks on the basis of micro or macro hedges. Purchases and sales of derivative instruments are made for hedging purposes in an effort to match as closely as possible the currency, duration and interest rate basis of our assets and liabilities. We minimize credit risk from fair value fluctuations by means of appropriate risk-mitigation measures set out in credit support annexes with every derivative counterparty. No derivative activities are undertaken on behalf of clients. Risks are analyzed in accordance with the KWG which requires adequate capital coverage for securities transactions, transactions in derivative products and foreign exchange transactions. See “Supervision and Regulation”.

Pursuant to the KWG we are obliged to maintain an adequate risk management which needs to ensure that the risk load capacity for credit, market-price, liquidity, operational and strategic risks are covered at all times. Based on our calculations our total capital permanently exceeds our risk profile.

Credit Analysis

We examine whether credit should be extended in response to direct inquiries either from potential borrowers themselves or from third parties such as other banks or brokers. This examination includes whether we can provide funds based on the applicable laws and regulations that govern Rentenbank.

An application for credit and creditworthiness is judged on the basis of our own credit analysis and supported by a diverse set of documents such as business reports and ratings. Approval for the extension of credit is made in compliance with our own credit approval regulations. Only after this approval are transactions allowed to go forward.

Currency Risk

As of December 31, 2025, a notional amount of €0.0 billion of liabilities to customers and €30.3 billion of securitized liabilities were denominated in a currency other than euro. Because our loan business is denominated almost exclusively in euro, we have eliminated currency risk by swapping the cash-flows from foreign denominated non-derivative issues virtually exclusively into euro through so-called cross-currency swaps, or, in the case of commercial paper, FX-swaps.

As of December 31, 2025, a notional amount of €0.1 billion of loans and advances to banks and €3.2 billion of financial investments were denominated in a currency other than euro. Those assets were either funded in the respective currency or hedged through a foreign currency swap.

Liquidity Management

We manage our liquidity based on a projection of all future cash flows. On a daily basis, we calculate the projected net liquidity balance for each day of the coming two years. Instruments available for managing the short-term liquidity position are interbank funds, Eurex Repo transactions, ECP issuances, and the participation in open market transactions and standing facilities within the ESCB. In addition, we calculate the medium and long-term liquidity of inflows and outflows of more than two years for the next 15 years on a daily basis.

Impact of Climate Change on Rentenbank’s Business Activities

In Germany, existing and proposed environmental laws and regulations aim at supporting environmentally friendly technology and procedures. An important law in this context is the German Renewable Energy Act (Erneuerbare-Energien-Gesetz), which promotes the development of renewable energy sources, such as the production of energy from biomass and the use of solar energy, by providing for financial contributions to energy producers. Our ultimate borrowers have increasingly used our lending services in order to invest in such renewable energy sources. Environmental, Social and Governance (ESG) factors are in the focus of the regulators and not least in the focus of the risk management of Rentenbank.

In its promotional activity, Rentenbank ensures the funding of local banks that grant its special promotional loans. The local bank bears the default risk of the ultimate borrower. Rentenbank’s customers are mainly classified as banks or German state institutions. The Bank does not invest directly in agriculture and forestry.

Rentenbank analyzes the potential effects of sustainability risks, including those arising from climate change. Various ESG scenarios focused on climate and environmental risks have been analyzed and the potential effects of climate change on Rentenbank’s capital and risk situation have been examined since 2020. After a revision in 2025, two climate scenarios are used to assess climate-related risks. For the medium to long-term perspective up to 2050, Rentenbank uses a reference scenario from the Network for Greening the Financial System (NGFS), which maps both physical and transition risks. In addition, a short-term climate scenario, which is also based on NGFS pathways, is used as part of capital planning. The respective scenarios show potential adverse effects under the respective assumptions but, based on the information currently available, do not have a material adverse effect on Rentenbank’s financial position, financial performance or capitalization in the short, medium or long-term.

We cannot predict the ultimate effect future climate change legislation and regulation could have on our borrowers’ businesses. However, through our promotional activities, we support our end borrowers in either mitigating climate change through environmentally friendly technologies or adapting to risks arising from climate change.

CAPITALIZATION

The following table shows Rentenbank’s capitalization based on the carrying amount as of December 31, 2025. Long-term debt includes all borrowings and bonds issued with remaining maturities in excess of one year.

As of December 31, 2025, Rentenbank’s total capital ratio as well as the Tier 1 capital ratio amounted to 32.6%. As in the prior year, Rentenbank met the regulatory requirements at all times in the reporting year. For a discussion of capital adequacy requirements under the KWG, see “Supervision and Regulation — Capital Adequacy Requirements”.

MANAGEMENT

Pursuant to the Rentenbank Law we have three principal governing bodies: the Management Board (Vorstand), the Supervisory Board (Verwaltungsrat) and the General Meeting (Anstaltsversammlung). The business address of each of the members of the Management Board and the Supervisory Board named below is Theodor-Heuss-Allee 80, 60486 Frankfurt am Main, Federal Republic of Germany.

Management Board

The Management Board is responsible for the day-to-day conduct of our business and the administration of our assets in accordance with the Rentenbank Law and represents us in dealings with third parties and the judiciary. According to Rentenbank’s Statutes, the Management Board is required to deliver to the Supervisory Board on a quarterly basis a written report on the business and financial condition of Rentenbank. In accordance with the general guidelines for the granting of loans which have been established by the Supervisory Board, the Management Board is required to report quarterly to the risk committee (Risikoausschuss) of the Supervisory Board regarding the development of unsecured credit and large exposures pursuant to the German banking regulations.

The Management Board is comprised of at least two members. Its members are appointed, and may be withdrawn by, the Supervisory Board by a two-thirds majority. The appointment of members of the Management Board requires the prior approval of the Supervising Authority.

The members of the Management Board are:

Dietmar Ilg (Chief Risk Officer)
Dr. Marc Kaninke (Chief Financial Officer/Chief Information Officer)
Nikola Steinbock (Chairwoman of the Management Board)

On December 19, 2025, the Board of Supervisory Directors appointed Dr. Oliver Engels as a new member of the Management Board. Dr. Engels has served as divisional director for Credit Risk Management, Risk Control, Operations Financial Markets as well as Cyber Security & Non-Financial Risk since January 1, 2026, and will serve as a full member of the Management Board for these divisions from July 1, 2027. For the period from July 1, 2026 to June 30, 2027, the Board of Supervisory Directors appointed Hubert Spechtenhauser as interim member of the Management Board responsible for these divisions. Dietmar Ilg, who joined Rentenbank in 2018 and is currently responsible for these divisions, will leave the bank at his own request as of June 30, 2026.

Rentenbank is not aware of any conflicts or potential conflicts of interest between the duties of each member of the Management Board to Rentenbank and such member’s private interests or other duties.

Supervisory Board

The Supervisory Board supervises, and appoints members to and is entitled to remove members from, the Management Board. It may issue general and specific instructions to the Management Board. In particular, the Supervisory Board approves Rentenbank’s annual report, adopts corporate governance principles, establishes general guidelines for the granting of loans, and allocates reserves consistent with the Rentenbank Law. Furthermore, the Supervisory Board adopts and may amend Rentenbank’s Statutes with the approval of the Supervising Authority. In addition, the following actions require the approval of the Supervisory Board: the issuance of bearer debentures, the acquisition and sale of investments, the purchase and sale of land and buildings, approval of employment contracts involving annual compensation above a threshold determined by the nomination committee of the Supervisory Board (Nominierungsausschuss), and the issuance of pension guidelines. The Supervisory Board must meet at least semi-annually.

The Supervisory Board may delegate certain authorities to committees thereof. Rentenbank’s Statutes require the Supervisory Board to form a risk committee (Risikoausschuss) concerned with the risk tolerance and risk strategy of Rentenbank, an audit committee (Prüfungsausschuss) concerned with financial and accounting matters, a remuneration committee (Vergütungskontrollausschuss) concerned with monitoring the adequacy of the remuneration systems, a nomination committee (Nominierungsausschuss) concerned with nomination, legal and administrative matters, and an expert committee (Fachausschuss) concerned with the allocation of retained earnings.

The Supervisory Board has 18 members, one of whom is the Federal Minister of Agriculture, Food and Regional Identity. Eight of the members of the Supervisory Board represent agricultural and food organizations, six of whom are appointed by the not-for-profit German Farmers’ Association (Deutscher Bauernverband e.V.), one of whom is appointed by the not-for-profit Farmers’ Mutual Savings Institution (Deutscher Raiffeisenverband e.V.) and one of whom is appointed by the various food organizations. Further, three members are ministers of agriculture of various German Federal States, one member each represents the Federal Ministry of Agriculture, Food and Regional Identity and the Federal Ministry of Finance. One member represents the not-for-profit trade unions. Finally, three members are elected as representatives of credit institutions or other credit experts.

The following is a list of the members of the current Supervisory Board:

Rentenbank is not aware of any conflicts or potential conflicts of interest between the duties of each member of the Supervisory Board to Rentenbank and such member’s private interests or other duties.

General Meeting

The General Meeting advises Rentenbank in matters of the promotion of agriculture and rural areas as well as on general agricultural and business policy issues. Furthermore, it decides on the appropriation of the promotional fund in accordance with the Rentenbank Law. The General Meeting receives reports of the Management Board on our business activities and of the Supervisory Board on resolutions adopted by the Supervisory Board. According to the Rentenbank Law, each year a General Meeting must be held.

The General Meeting consists of 28 members representing owners and lessees of land subject to our land charges. The German Federal States of Baden-Württemberg, Bavaria, Brandenburg, Hesse, Mecklenburg-Western Pomerania, Lower Saxony, North Rhine Westphalia, Rhineland-Palatinate, Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia each appoint two members to the General Meeting, and the German Federal States of Berlin, Bremen, Hamburg and Saarland each appoint one member.

Corporate Governance

In November, 2004 the Supervisory Board approved certain corporate governance principles for Rentenbank that regulate the conduct of its management. As a result, Rentenbank has voluntarily submitted to the relevant principles set forth in the German Corporate Governance Code. These principles include the regulation of conflicts of interest, compensation of members of the Management Board and the Supervisory Board, transparency and disclosure obligations and accounting and audit. Compliance with the German Corporate Governance Code is required by all German publicly-traded companies and recommended to all other German companies. Because Rentenbank is an institution established under public law, certain principles set forth in the German Corporate Governance Code, including principles governing the relationship with and meetings of shareholders, are not applicable to Rentenbank.

In 2007, the corporate governance principles were updated and a declaration of conformity (Entsprechenserklärung) was published for the first time on our website (www.rentenbank.de).

Rentenbank adopted the public Public Corporate Governance Code (Public Corporate Governance Kodex des Bundes, “PCGC”), as of June 30, 2009 as amended from time to time, as promulgated by the German federal government, by resolution of the Supervisory Board dated July 16, 2009. The PCGC is mainly addressed to companies that are legal entities under private law. However, unless legal provisions (such as the Rentenbank Law) require otherwise, application of the Code is also recommended for companies that are legal entities under public law. Rentenbank is a public law institution directly accountable to the German federal government.

EMPLOYEES

At December 31, 2025, we had 492 employees (interns, apprentices, employees on parental leave and members of the Management Board excluded). As a member of the German Association of Public Banks, Rentenbank applies the collective wage agreement concluded with the relevant trade union. As of December 31, 2025, 42.7% of Rentenbank’s employees were paid according to the collective wage scale, while 57.3% were paid above the collective wage scale.

SUPERVISION AND REGULATION

General

The Rentenbank Law provides explicitly for our responsibility for the promotion of agriculture and of rural areas. For a further description see “General - Overview” above. The Federal Republic of Germany guarantees all existing and future obligations of Rentenbank in respect of money borrowed, bonds and notes issued and derivative transactions entered into by Rentenbank, as well as obligations of third parties that are expressly guaranteed by Rentenbank (the “Guarantee of the Federal Republic”). This is statutorily provided for by Section 1a of the Rentenbank Law. See also “General — Relationship with the Federal Government — Guarantee of the Federal Republic”.

As a federal development bank, Rentenbank underlies federal influence by the representation of the Federal Government on the Supervisory Board. The Minister of Agriculture, Food and Regional Identity is deputy chairman of the Supervisory Board. Representatives of the Federal Ministry of Agriculture, Food and Regional Identity and the Federal Ministry of Finance are members of the Supervisory Board.

In addition, Rentenbank is subject to the supervision of the Federal Ministry of Agriculture, Food and Regional Identity which exercises its supervision in concert with the Federal Ministry of Finance. The statutory function of this Rentenbank-specific Supervising Authority is to ensure that the operations of Rentenbank adhere to public interest in the promotion of agriculture and rural areas, and are in accordance with German law and with Rentenbank’s Statutes. The Supervising Authority may request information regarding our operational matters, inspect our books and records and participate in all Supervisory Board meetings and General Meetings with the authority to issue motions and to comment on topics at such meetings. In addition, the Supervising Authority has the authority to schedule a meeting of any of our three governing bodies and is authorized to prevent the implementation of any resolution that is against public interest or violates German law or Rentenbank’s Statutes.

In accordance with Section 13 of the Rentenbank Law, Rentenbank may issue registered bonds and notes that are secured debt covered by a pool of eligible assets. These assets include covered bonds or debentures issued in accordance with the German Pfandbrief Act (Pfandbriefgesetz), loans to domestic statutory corporations (Körperschaften) and certain public institutions (Anstalten des öffentlichen Rechts) and loans for which sufficient collateral exists. Our total capacity to issue secured debt is based on the amount of our assets available for use as collateral for these debt securities. After consultation with Rentenbank, the Supervising Authority nominates a trustee (Treuhänder) and a deputy trustee. It is the responsibility of the trustee to ensure that issuance, administration and security of such bonds comply with the legal and regulatory requirements and the terms and conditions of the bonds. The current trustee is the senior government official Mr Alois Bauer and the current deputy is the senior government official Mr Martinus Wejwer.

We are authorized to carry out the types of banking business which are set forth in the Rentenbank Law. Since Rentenbank is – as well as other German promotional banks – exempted from the scope of the Capital Requirements Directive (CRD) the banking supervisory system for Rentenbank is based on the KWG. Rentenbank is therefore supervised by the national competent authorities BaFin and Deutsche Bundesbank. The KWG incorporates most of the European banking supervisory standards. The requirements of the CRR are applicable for us due to the reference in Section 1a KWG. As laid down in Section 2 paragraph 9i KWG the only part of the CRR which has not to be met are the requirements for disclosure according to Art. 431-455 CRR.

We are in compliance with the German and European laws that are applicable to our business in all material respects.

KWG and CRR

The KWG contains the principal rules for German banks, including the requirements for a banking license, and regulates the business activities of German banks.

Under the KWG, every entity that is engaged in one or more of the financial activities defined therein as “banking business” (Bankgeschäfte) is subject to the licensing requirements and other provisions of the KWG, unless specifically exempted therefrom.

Furthermore, significant parts of the regulatory framework for banks in the EU are governed by the CRR. The CRR applies directly to so-called “CRR credit institutions”. However, due to the reference in Section 1a KWG, the requirements of the CRR generally also apply to non-CRR credit institutions such as Rentenbank. The CRR primarily sets forth the requirements applicable to us relating to regulatory capital, risk-based capital adequacy, monitoring and control of large exposures and liquidity. Additional regulatory and implementing technical standards are also applicable to us, and are developed by the European Supervisory Authorities (“ESAs”) and adopted by the European Commission, by means of delegated or implementing acts. These so-called level 1 and 2 provisions are supported by guidelines and Q&As. Guidelines pursuant to Article 16 of the ESAs founding Regulations and Q&As pursuant to Article 29 of the ESAs founding Regulations are convergence tools intended to harmonize supervision in the EU, specifically through consistent application of EU law, a common supervisory culture and coherent supervisory practices. European Banking Authority (“EBA”) guidelines, although not directly applicable, are, as a general rule, implemented into German law by BaFin (“comply or explain”-procedure).

Certain other requirements applicable to us, including those with respect to additional capital and organizational requirements, are set forth in the KWG and other German laws.

Capital Adequacy Requirements

The CRR requires banks to maintain an adequate level of regulatory capital in relation to their risk positions. Risk positions (commonly referred to as “risk-weighted assets”) include credit risks (including Credit Valuation Adjustments for OTC derivatives due to deterioration in creditworthiness), market risks and operational risks (including, among other things, risks related to certain external factors, as well as to technical errors and errors of employees). The regulatory capital known as “own funds” can be classified into three components with different quality levels. The most important type of capital for compliance with the capital requirements under the CRR (see below) is “Common Equity Tier 1” capital (“CET1”). CET1 capital primarily consists of share capital, retained earnings and other reserves, subject to certain regulatory adjustments. Another component of capital is "Additional Tier 1” capital. These instruments have to comply with the requirements stated in Article 52 CRR and cannot qualify as CET1 items.

CET1 capital and Additional Tier 1 capital together constitute Tier 1 capital. The other type of capital is “Tier 2” capital which generally consists of long-term subordinated debt instruments. Tier 1 capital and Tier 2 capital together constitute “own funds”.

Under the CRR, banks are required to maintain a minimum ratio of CET1 capital to risk-weighted assets of 4.5% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6%. The minimum total capital ratio of own funds to risk-weighted assets is 8%.

In addition to the aforementioned capital adequacy requirements, banks must maintain a capital conservation buffer of 2.5% of the total risk exposure consisting of CET1 capital and an institution-specific countercyclical capital buffer between 0% and 2.5% (if necessary, the competent authority can set a rate of more than 2.5%) consisting of CET1 capital. Moreover, the competent authority may require all institutions or certain types or groups of institutions to maintain a systemic risk buffer of at least 0.5%, consisting of CET1 capital for exposures located in a European Economic Area (“EEA”) state or a non-EEA state. Currently the systemic risk buffer of 4.5% for exposure located in Norway is relevant for Rentenbank.

Institutions that are not globally systemically important such as Rentenbank have to comply with the minimum requirement for a leverage ratio of 3%. The relevant capital measure is the Tier 1 capital. Promotional banks have the option to except certain exposure from the total exposure measure to strengthen their Leverage Ratio.

Rentenbank meets all reporting and minimum requirements for capital ratios and the leverage ratio.

Liquidity Requirements

According to Part 6 of CRR institutions have to fulfill a liquidity coverage requirement intended to ensure that banks have an adequate stock of unencumbered high-quality liquid assets that can be easily and quickly converted into cash to meet their liquidity needs in a 30 calendar day liquidity stress scenario. The required Liquidity Coverage Ratio (“LCR”) is calculated as the ratio of a bank’s liquidity buffer to its net liquidity outflows. Generally, institutions, have to meet a minimum LCR of 100%.

In addition, Part 6 of CRR requires banks to calculate a net stable funding ratio (“NSFR”) to reduce medium- to long-term funding risks by requiring banks to fund their activities with sufficiently stable sources of funding. The NSFR indicates if an institution holds sufficient stable funding to meet its funding needs during a one-year period under both normal and stressed conditions. Institutions have to maintain a minimum NSFR of 100%.

The third requirement of Part 6 of CRR contains the reporting requirement for Additional Monitoring Metrics for liquidity reporting (AMM). AMM provides information about a bank’s composition of liquidity which is neither included in the LCR nor in the NSFR and does not include a minimum requirement.

Rentenbank meets all reporting and minimum requirements for LCR and NSFR. Furthermore, Rentenbank meets all reporting requirements for AMM.

Limitation on Large Exposures

Part 4 of the CRR contains the requirements for large exposures, which limit a bank’s concentration of credit risks. The KWG and the Large Exposures and Million Loan Regulation (Großkredit- und Millionenkreditverordnung) supplement on national level the CRR. The CRR defines large exposures as exposure to a single borrower or group of connected clients that equals or exceeds 10% of the bank’s Tier 1 capital. Besides various monitoring and reporting requirements, large exposures must not exceed 25% of the bank’s Tier 1 capital.

Rentenbank meets all reporting and maximum requirements for large exposures.

Audits

Under German law, Rentenbank must be audited annually by a certified public accountant (Wirtschaftsprüfer) who is appointed by our Supervisory Board with the consent of the Banking Supervision Authorities. BaFin and Deutsche Bundesbank must be informed of and may reject this appointment. Under the KWG, a bank’s public accountant is required to inform BaFin and Deutsche Bundesbank of any facts coming to his or her attention which give reason to deny or qualify the certification of Rentenbank’s annual financial statements or materially adversely affect the financial position of Rentenbank, as well as of any material breach by Rentenbank’s management of the law or Rentenbank’s Statutes.

The certified public accountant is required to prepare annually a detailed and comprehensive long-form audit report, which is submitted to our Management Board and Supervisory Board, BaFin and Deutsche Bundesbank.

Reporting Requirements and Investigations

BaFin may conduct audits, including on-site inspections, of banks on a random basis, as well as for cause. In particular, BaFin may audit our compliance with all relevant requirements for banking supervision, i.e. requirements from KWG, CRR, business conduct in the securities markets and the regulation of anti-money laundering and terrorist financing. In addition, BaFin may attend meetings of Rentenbank’s Supervisory Board and may require such meetings to be convened.

Banks have to enable BaFin to monitor their compliance with banking regulation via regular reportings. BaFin obtains among others information about the financial condition of German banks from the annually audited financial statements as well as the monthly balance sheet. Furthermore, all regulatory reportings according to KWG and CRR are submitted by banks to BaFin and/or Deutsche Bundesbank.

Besides these regular reportings to the national supervisors, BaFin may require further information and documents from a bank as needed.

BaFin Supervisory and Enforcement Power

In the event that BaFin discovers irregularities, it has a wide range of enforcement powers. BaFin may, for example, impose additional own funds or liquidity requirements in excess of statutory requirements, restrict or limit a bank’s business, require the cessation of activities to reduce risk, require a bank to use net profits to strengthen its own funds, remove the members of the bank’s management or supervisory board from office or prohibit them from exercising their current managerial capacities.

In particular, if a bank is in danger of defaulting on its obligations to creditors, BaFin may take emergency measures to avert default. These measures may range from the issuance of instructions to the management of such bank to the revocation of the respective bank’s license and closing of the respective bank, the prohibition of payments and disposals of assets, the suspension of customer services and the suspension of acceptance of payments other than in payment of debt owed to such bank.

BaFin may also impose administrative pecuniary penalties under the KWG and other German laws. Penalties under the KWG may generally be up to €5 million. If the economic benefit derived from the offense is higher, BaFin may impose penalties of up to 10% of the net turnover of the preceding business year or double the amount of the economic benefit derived from the violation.

Furthermore, violations of the KWG may result in criminal and administrative penalties.

Regulatory changes in the banking sector on EU level

Because of the elaborations of the Basel Committee on Banking Supervision (“BCBS”) regarding the finalization of the Basel III post-crisis reforms, colloquially known as Basel IV, there were further regulatory changes in the EU banking sector. The remaining changes in regulation were implemented in the EU by the CRR III. The final legislation for the European implementation to finalize the Basel rules was published in June 2024. It is applicable since January 1, 2025, while parts of CRR III have already become effective in 2024. Among other topics there are material changes to the standardized approach for credit risk (SA), the calculation of credit valuation adjustments (“CVA”) and the capital requirements for operational risks. Rentenbank has implemented all relevant requirements.

FINANCIAL SECTION

FINANCIAL STATEMENTS AND AUDITORS

The financial statements of Rentenbank included in Exhibit (e) to this annual report have been prepared in accordance with the German Commercial Code (HGB) and the more specific requirements of the Regulation on the Accounting of Credit Institutions and Financial Services Institutions (Verordnung über die Rechnungslegung der Kreditinstitute, Finanzdienstleistungsinstitute und Wertpapierinstitute (Kreditinstituts-Rechnungslegungsverordnung; “RechtKredV”), as well as various additional practices, laws and regulations of the Federal Republic of Germany (collectively “German GAAP”). German GAAP emphasizes the principle of prudence (Vorsichtsprinzip) in the presentation of the financial statements to protect the interests of creditors.

Pursuant to Section 9 of Rentenbank’s Statutes, the annual financial statements of Rentenbank included in Exhibit (e) to this annual report are to be examined by a Wirtschaftsprüfer (certified public accountant) who is appointed by the Supervisory Board with the consent of the Supervising Authority. The public accountant’s long-form audit report (Prüfungsbericht) serves as the basis for the audit of the General Accounting Office (Bundesrechnungshof).

Rentenbank’s external auditors are Deloitte GmbH Wirtschaftsprüfungsgesellschaft, (Frankfurt am Main office) (hereinafter referred to as “Deloitte”).

The annual audit of the financial statements included in Exhibit (e) to this annual report is conducted in accordance with German Generally Accepted Auditing Standards and in accordance with the EU Audit Regulation No. 537/2014. In the case of an institution directly under the federal government's supervision, such as Rentenbank, the scope of the audit is extended to meet the requirements of the Budgeting and Accounting Act (Haushaltsgrundsätzegesetz). Such Act requires that the audit and the resulting report be designed in such a way that enables the Supervisory Board, the Supervising Authority, and the General Accounting Office to form their own opinion and take action as and when required. One of the specific aspects to be covered by the extended audit and the audit report is the proper conduct of Rentenbank’s business by its management.

In accordance with § 340(h) of the German Commercial Code (HGB), foreign currency amounts were converted and valued on the balance sheet date. Where foreign currency was set up to hedge interest and interest currency swap transactions, they are valued as a single unit.

The financial statements included in Exhibit (e) to this annual report were drawn up uniformly in accordance with the accounting and valuation methods authorized for Rentenbank.

The audit report of Deloitte for the year ended December 31, 2025, dated March 2, 2026, refers to a management report (Lagebericht) included in Exhibit (e) to this annual report. The examination of, and the audit report upon, this management report is required under German Generally Accepted Accounting Standards (“German GAAS”). This examination was not made in accordance with U.S. Generally Accepted Auditing Standards (“U.S. GAAS”), U.S. attestation standards or standards issued by the Public Company Accounting Oversight Board (“PCAOB Standards”). Therefore, Deloitte does not provide any opinion on the aforementioned examination or on the financial statements included in Exhibit (e) to this annual report in accordance with U.S. GAAS, U.S. attestation standards or PCAOB Standards.

A reprint of the auditor’s report can be found starting on page 92 of Exhibit (e) to this annual report.

SUMMARY OF MATERIAL DIFFERENCES
BETWEEN GERMAN GAAP AND U.S. GAAP

The financial statements of Rentenbank included in Exhibit (e) to this annual report have been prepared in accordance with German GAAP. As a result, Rentenbank’s financial statements included in Exhibit (e) to this annual report may differ substantially from financial statements prepared in accordance with accounting principles generally accepted and financial reporting practices followed in the United States (“U.S. GAAP”). Rentenbank is not required to prepare or present financial statements in accordance with accounting and reporting practices and principles followed in the United States.

The following is a summary of material differences between German GAAP and U.S. GAAP as of the dates of Rentenbank’s financial statements included in Exhibit (e) to this annual report. It should not be taken as an exhaustive list of all differences. No attempt has been made to identify all disclosure, presentation or classification differences that would affect the manner in which transactions or events are presented in the financial statements of Rentenbank, or notes thereto (both included in Exhibit (e) to this annual report.

Investment Securities

Under German GAAP, securities are classified as securities in the trading portfolio, “liquidity reserve” securities or fixed assets. Fixed assets are valued based on the “modified lower of cost or market principle” according to which the historic cost (the original purchase price) is subject to exceptional depreciation only if a permanent impairment in value is expected. Liquidity reserve securities are current assets and recorded at the lower of cost or market. Trading portfolio securities are recorded at fair value under consideration of a deduction to account for risk. All recognized changes in valuation are recorded in current income or expense, as applicable.

Under U.S. GAAP, investments in debt securities are classified into the categories trading, available for sale or held to maturity. According to Accounting Standards Codification (“ASC”) 320 “Investments – Debt and Equity Securities”, securities held to maturity are carried at amortized cost and are subject to other-than-temporary impairment tests. Trading and available-for-sale securities are recorded at fair value. Adjustments to the fair value of available-for-sale securities are included in other comprehensive income, a separate component of equity, while adjustments to the fair value of trading securities are recognized in profit or loss.

Derivative Instruments and Hedge Accounting

Under German GAAP, derivative instruments and embedded derivatives may be included in a financial institution’s trading book or investment book. Trading derivatives are treated as current assets or liabilities and recorded at fair value under consideration of a deduction to account for risk. Hedge accounting is permitted as micro-hedge, portfolio-hedge or macro-hedge. Derivative financial instruments used for hedging purposes are generally accounted for as off-balance-sheet transactions and, in the case of Rentenbank, are disclosed in the notes to the financial statements included in Exhibit (e) to this annual report. Unrealized gains and losses of both the derivative financial instrument and hedged items are generally not recorded on the balance sheet or in the income statement. The related income and expense of a derivative financial instrument, such as interest income related to interest rate swaps, is reported on a basis consistent with the underlying hedged item pro rata temporis.

Under U.S. GAAP pursuant to ASC 815, Derivatives and Hedging, derivative instruments and embedded derivatives are recorded on the balance sheet at fair value as either assets or liabilities. Subject to certain specific qualifying conditions in ASC 815, a derivative instrument may be designated either as a hedge of changes in the fair value of a recognized asset or liability, an unrecognized firm commitment, or an identified portion of such an asset, liability or firm commitment (fair value hedge), or as a hedge of the exposure to variability in cash flows of a recognized asset or liability or a probable forecast transaction (cash flow hedge). A derivative instrument qualifying as a fair value hedge is measured at fair value with changes in fair value recognized in profit or loss. The hedged item is remeasured to fair value in respect of the hedged risk. For a derivative instrument qualifying as a cash flow hedge, fair value gains or losses associated with the risk being hedged are recorded in other comprehensive income and reclassified to profit or loss when the hedged item affects profit or loss.

Provision for Loan Losses

German GAAP requires that, in establishing and maintaining the allowance for loan losses, entities consider all evident risks relating to their lending operations, primarily counterparty credit risk. Specific provisions account for anticipated losses reduced by the expected net realizable value of any collateral provided. Additionally, Rentenbank maintains a general reserve based on expected losses.

Under U.S. GAAP, guidance relating to the impairment of loans is included in ASC 326 Measurement of Credit Losses on Financial Instruments. The CECL (Current Expected Credit Loss) model applies to financial assets measured at amortized cost and certain off-balance sheet credit exposures. For instruments in the scope of the general CECL model, lifetime expected credit losses are recorded upon initial recognition of the instrument as an allowance for loan losses. The allowance for loan losses is a valuation account deducted from the amortized cost of the financial assets to present the net amount expected to be collected. Each reporting period, changes in the estimate of expected credit losses are generally recognized through earnings as a credit expense or a reversal of credit expense. When estimating CECL, reporting entities are required to calculate expected credit losses on a "pooled" basis when instruments have similar risk characteristics.

Certain Provisions and Reserves

German GAAP permits provisions for general banking risks by setting up certain “hidden” reserves. In accordance with Section 340(f) of the German Commercial Code banks can set up reserves based on the valuation of loans and advances to banks and customers as well as securities held as part of the liquidity reserve by recording these assets at a lower amount than generally required. Hidden reserves are restricted to 4% of the value of the assets. Income and expenditure relating to movements in the hidden reserves may be netted with the income or expenditure relating to lending operations and securities held as part of the liquidity reserve. In addition, in accordance with Section 340(g) of the German Commercial Code, a general provision for general risks related to the specific business model is also permitted and disclosed on the face of the balance sheet.

Under U.S. GAAP, loan loss provisions are only recorded when certain criteria are met. In accordance with ASC 450 “Contingencies” a provision is only recognized when (a) information available prior to issuance of the financial statements indicates that it is probable that an asset has been impaired at the date of the financial statements and (b) the amount of the loss can be reasonably estimated.

Reacquired Own Debt Securities

Under German GAAP, own debt securities that are reacquired with the intention of resale are recorded as assets at acquisition cost, and subsequently valued at the lower of cost or market. Gains or losses on resale of such securities are recorded in the profit and loss account.

Under U.S. GAAP, repurchased own debt securities result in a reduction of outstanding liabilities on the balance sheet, irrespective of whether the securities are intended for resale or not. The difference between the cost of re-acquisition and the carrying amount of outstanding debt is recorded in current income.

Property and Equipment

Under German GAAP, property and equipment is reported at acquisition or manufacturing cost, as applicable, and depreciated over its estimated economic useful life. In practice, depreciation is carried out on the basis of the depreciation tables issued by the tax authorities. Based on the modified lower of cost or market principle, any expected permanent impairment of property and equipment results in additional depreciation. Additional depreciation is reversed when the reason for the impairment no longer exists.

U.S. GAAP requires that property and equipment be carried at cost less scheduled depreciation in accordance with the estimated economic useful life of the asset. U.S. GAAP requires that assets be reviewed for impairment. Therefore, the carrying amount of the asset is compared with the sum of the undiscounted cash flows. If the carrying amount of the asset exceeds the sum of the undiscounted cash flows, the carrying amount of the asset is compared to the fair value and an impairment loss is recognized to the extent fair value exceeds the carrying amount of the asset. U.S. GAAP does not permit a reversal of impairment losses.

Pension Provisions

Under German GAAP, Pension provisions are measured based on generally accepted actuarial principles, using the projected unit credit (PUC) method. The provision amount determined under the PUC method is defined as the actuarial present value of the pension obligations which has been earned by the employees as of the relevant date due to their periods of service in the past, based on the pension benefit formula and the vesting provisions. These provisions are discounted pursuant to Section 253 paragraph 2 of the German Commercial Code and the related decree on the Discounting of Provisions (Rückstellungsabzinsungsverordnung). Since 2016, the discount rates used for pension obligations are the average market interest rates for the past ten fiscal years; until 2015 the average market interest rates for the past seven fiscal years were used.

Under U.S. GAAP, a pension asset or liability representing the excess or deficit of plan assets over benefit obligations is recognized in the balance sheet for defined benefit plans. The pension benefit obligation is generally calculated using the projected unit credit method, including assumptions for future salary increases.

Trust Assets / Trust Liabilities

Under German GAAP, assets and equal liabilities held in trust are recorded on the balance sheet. Under U.S. GAAP, these items would generally not be recorded on the balance sheet.

SUPPLEMENTARY INFORMATION ON FUNDED DEBT⁽¹⁾

The following table sets forth information concerning Rentenbank’s outstanding bonds and notes as of December 31, 2025, with an initial maturity of more than one year and issued in the capital markets.

THE FEDERAL REPUBLIC OF GERMANY

The following information regarding the Federal Republic is derived from the public official documents cited below. Certain information is preliminary.

GENERAL

Area, Location and Population

The Federal Republic is situated in central Europe and comprises an area of approximately 358,000 square kilometers (about 138,000 square miles). According to a first estimate of the Federal Statistical Office, approximately 83.5 million people were living in Germany at the end of 2025, which represents a slight decrease of approximately 100,000 people compared to the end of 2024. These population figures are extrapolated from figures from the 2022 census, published on June 25, 2024. As a result of the 2022 census, the population figure as of May 15, 2022, was revised downward by approximately 1.3 million, from 84.0 million (based on the 2011 census) to 82.7 million inhabitants. Net immigration (defined as immigration minus emigration) was again positive in 2025, but was of insufficient magnitude to prevent the population from shrinking for the first time since 2020. According to the first estimate, in 2025 between 220,000 and 260,000 more people came to Germany than left the country. Thus, net immigration fell by at least 40% in 2025 compared to 2024 (430,183 people) and was at a level similar to that of 2020. In contrast, as in all years since German reunification in 1990, more people died than were born in 2025, which had a dampening effect on population growth. In 2025, the number of births fell again compared to 2024 and is expected to be between 640,000 and 660,000 (2024: 677,117), whereas the number of deaths remained stable at around 1.00 million (2024: 1.01 million), resulting in a birth deficit (difference between births and deaths) of between 340,000 and 360,000. At the end of 2024, approximately 17.4% of the total population was concentrated in metropolitan areas with more than 500,000 inhabitants; the largest of these areas were (in descending order) Berlin, Hamburg, Munich, Cologne and Frankfurt am Main.

Sources: Statistisches Bundesamt, Bundesländer mit Hauptstädten nach Fläche, Bevölkerung und Bevölkerungsdichte am 31.12.2024 (23.09.2025) (https://www.destatis.de/DE/Themen/Laender-Regionen/Regionales/Gemeindeverzeichnis/Administrativ/02-bundeslaender.html); Statistisches Bundesamt, Bevölkerung Deutschlands nimmt im Jahr 2025 um rund 100 000 Personen ab, press release of January 29, 2026 (https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/01/PD26_032_124.html); Zensus 2022, Zensus 2022: 82,7 Millionen Einwohnerinnen und Einwohner, press release of June 25, 2024 (https://www.zensus2022.de/DE/Aktuelles/PM_Zensus_2022_Bevoelkerungszahl_Ergebnisveroeffentlichung.html); Statistisches Bundesamt, Städte (Alle Gemeinden mit Stadtrecht) nach Fläche, Bevölkerung und Bevölkerungsdichte am 31.12.2024 (23.09.2025) (https://www.destatis.de/DE/Themen/Laender-Regionen/Regionales/Gemeindeverzeichnis/Administrativ/05-staedte.html).

The following table shows selected key demographic figures for the Federal Republic for the years stated.

Population (1)

(1)       Based on census 2011.

Source: Statistisches Bundesamt, Bevölkerung, Bevölkerungsstand, Bevölkerung nach Altersgruppen (ab 2011) (https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Bevoelkerung/Bevoelkerungsstand/Tabellen/liste-altersgruppen-basis-2022.html).

Without the surplus resulting from net immigration, the total population would have decreased every year since German reunification in 1990 because more people died than were born in each year. These developments are expected to continue, together with the continued aging of the population. According to the 16th coordinated population projection of the Federal Statistical Office published in December 2025 and covering the period until 2070, the share of people of retirement age (which will be 67 years from 2031 onwards) will rise to one quarter by the year 2035. The number of people of working age (20 to 66 years), which currently comprises 51.2 million people, will decrease to between 45.4 and 48.0 million until 2040 years, which may result in a downward pressure on Germany’s growth potential in the long term. The number of those aged 80 or over will remain relatively stable until the early 2030s, amounting to around 6.0 million. Subsequently, this elderly population is expected to increase strongly, along with the related need for long-term care. If net immigration remains at the average of the period from 1990 to 2031 (350,000 persons per year), around 81 million people would live in Germany in 2070. However, with a low level of net immigration of 150,000 people per year, which was the average of the years from 1955 to 1989, the population would decrease to just below 69 million people in 2070.

Sources: Statistisches Bundesamt, Bevölkerung Deutschlands nimmt im Jahr 2025 um rund 100 000 Personen ab, press release of January 29, 2026 (https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/01/PD26_032_124.html); Federal Statistical Office, By 2035, one quarter of Germany’s population will be aged over 67 or over, press release of December 11, 2025 (https://www.destatis.de/EN/Press/2025/12/PE25_446_12.html); Bevölkerungsvorausberechnung: 16. Koordinierte Bevölkerungsvorausberechnung, Annahmen und Ergebnisse (in German only, https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Bevoelkerung/Bevoelkerungsvorausberechnung/annahmen_ergebnisse_16te_kBv.html).

Government

The Federal Republic is a federated republic whose constitution is codified in the Grundgesetz of 1949. The capital of the Federal Republic is Berlin. The Federal Republic consists of 16 federal states (Länder). The Länder have legislative sovereignty over matters not expressly reserved to the legislative, executive and judicial bodies of the Federal Republic.

The Grundgesetz provides for a Federal President (Bundespräsident), two Houses of Parliament (the Bundestag and the Bundesrat, the latter consisting of representatives of the 16 Länder governments), a Chancellor (Bundeskanzler) and a Federal Constitutional Court (Bundesverfassungsgericht). The Chancellor heads the Federal Government (Bundesregierung), consisting of the Chancellor and the Federal Ministers. The Bundespräsident acts as head of state.

General elections for the Bundestag are generally held every four years on the basis of an electoral system of proportional representation. The most recent general election to the 21st Bundestag was held approximately seven months earlier than initially planned on February 23, 2025, following the termination of the previous governing coalition and the decision of the Bundespräsident to dissolve the 20th Bundestag at the proposal of the Bundeskanzler on December 27, 2024.

Sources: The Federal Returning Officer, Bundestag Election 2025, Election to the 21st German Bundestag on 23 February 2025 (https://www.bundeswahlleiterin.de/en/info/presse/mitteilungen/bundestagswahl-2021/52_21_endgueltiges-ergebnis.html).

A political party is not entitled to party representation in the Bundestag unless it receives at least 5% of the votes cast or three direct mandates, awarded to the candidate with the most votes in a given electoral district, in a general election. Upon proposal by the Bundespräsident, the Chancellor is elected by and is responsible to the Bundestag.

Political Parties

The political parties currently represented in the Bundestag are: the Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU); the Alternative for Germany (AfD); the Social Democratic Party (SPD); the Greens (Bündnis 90/Die Grünen); the Left-Wing Party (Die Linke) and the Südschleswigscher Wählerverband (SSW), which participates in the distribution of seats of the Bundestag as a party representing the Danish minority in the Federal State of Schleswig-Holstein, to which the threshold of five percent of votes cast or three direct mandates for participation in the Bundestag does not apply.

Since 1949, the Federal Republic has been governed by ten Chancellors over 21 electoral periods. The most recent general election, held on February 23, 2025, resulted in a coalition between CDU/CSU and SPD. On May 6, 2025 the Bundestag elected Friedrich Merz (CDU) Chancellor for the first time.

Sources: “Verantwortung für Deutschland” – Koalitionsvertrag zwischen CDU, CSU und SPD (https://www.spd.de/regierungsbildung); Deutscher Bundestag, Friedrich Merz mit 325 Stimmen zum Bundeskanzler gewählt (https://www.bundestag.de/dokumente/textarchiv/2025/kw19-de-kanzlerwahl-1062470)

The following table shows the results of the five most recent general elections for the Bundestag.

Election Results to the German Bundestag

Sources: The Federal Returning Officer, Bundestag election 2025 (https://www.bundeswahlleiterin.de/en/bundestagswahlen/2025/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag Election 2021 (Repeat election in parts of Berlin on 11 February 2024), Results (https://www.bundeswahlleiterin.de/en/info/presse/mitteilungen/bundestagswahl-2021/52_21_endgueltiges-ergebnis.html);The Federal Returning Officer, Bundestag election 2017, Results (https://www.bundeswahlleiterin.de/bundestagswahlen/2017/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag election 2013, Results, Germany (http://www.bundeswahlleiterin.de/en/bundestagswahlen/2017/ergebnisse/bund-99.html); The Federal Returning Officer, Bundestag election 2009, Election to the 17th German Bundestag on 27 September 2009 (https://www.bundeswahlleiterin.de/en/bundestagswahlen/2009.html).

International Organizations

In addition to the EU, the Federal Republic is a member of various major multilateral institutions, including the United Nations, the International Monetary Fund (“IMF”), the International Bank for Reconstruction and Development and the International Development Association, the Council of Europe, the Organization for Economic Cooperation and Development and the North Atlantic Treaty Organization (“NATO”). Furthermore, the Federal Republic is a signatory to the General Agreement on Tariffs and Trade and a member of the World Trade Organization (“WTO”). It is also a shareholder of, among others, the European Investment Bank (“EIB”), the European Bank for Reconstruction and Development, the Asian Infrastructure Investment Bank and the European Atomic Energy Community.

The European Union and European Integration

The Federal Republic was one of the six founding members of the European Coal and Steel Community in 1951, which later developed into the EU. Since its foundation, the EU has grown considerably. Following the withdrawal of the United Kingdom from the EU on January 31, 2020, 27 countries currently form part of the EU. These include Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain and Sweden (together, the “EU Member States”).

According to provisional data, the aggregate population of the 27 EU Member States was approximately 450 million as of January 1, 2025. Active formal accession negotiations are currently being conducted with Montenegro, Serbia, Albania, North Macedonia, Ukraine, Moldova and Bosnia and Herzegovina.

While Türkiye is a key strategic partner of the EU on issues including migration, security, counter-terrorism, and trade, accession negotiations with Türkiye have not progressed in recent years. Kosovo applied for EU membership in December 2022 and remains a potential candidate. In December 2023 the European Council decided to open accession negotiations with the candidate country Ukraine. In addition, in 2023 Georgia was granted candidate status by the European Council, on the understanding that it will take relevant steps, as set out in the European Commission recommendation dated November 2023. In December 2024 the European Council suspended the EU accession process as the Georgian government showed insufficient political commitment. In March and June 2024 accession negotiations with the candidate countries Bosnia and Herzegovina and Moldova were started.

In November 2023, the European Commission adopted the Growth Plan for the Western Balkans to accelerate the accession process of the Western Balkans. In October 2024, the European Commission approved the Reform Agendas of Albania, Kosovo, Montenegro, North Macedonia and Serbia, which qualified these countries for the Growth Plan’s benefits ahead of their full integration into the EU. Funds under the Reform and Growth Facility for the Western Balkans were disbursed to Albania, Moldova, Montenegro, North Macedonia in Fall 2025 and to Serbia in January 2026.

Sources: European Union, Principles, countries, history, History of the EU (https://european-union.europa.eu/principles-countries-history/history-eu_en); European Union Principles, countries, history, History of the EU, History of the European Union 1945-59 (https://european-union.europa.eu/principles-countries-history/history-eu/1945-59_en); European Union, Principles, countries, history, EU countries (https://european-union.europa.eu/principles-countries-history/eu-countries_en#the-27-member-countries-of-the-eu); Statistical Office of the European Communities, Total population (https://ec.europa.eu/eurostat/databrowser/view/tps00001/default/table?lang=en);European Commission, Enlargement Policy (https://enlargement.ec.europa.eu/enlargement-policy_en ), European Commission, Enlargement, Bosnia and Herzegovina (https://enlargement.ec.europa.eu/countries/bosnia-and-herzegovina_en); European Commission, Enlargement, Kosovo (https://enlargement.ec.europa.eu/enlargement-policy/kosovo_en), European Commission, Enlargement Policy, Growth Plan for the Western Balkans (https://enlargement.ec.europa.eu/enlargement-policy/growth-plan-western-balkans_en).

Political Integration

The EU is based on treaties that are binding agreements between the EU Member States and have been approved voluntarily and democratically by all EU Member States. The treaties set out the EU’s objectives, the rules governing the EU institutions, the way decisions are taken and the relationship between the EU and the EU Member States. Treaties are amended from time to time to make the EU more efficient and transparent, to prepare for the accession of candidate countries as new EU Member States and to introduce new areas of cooperation. Under the treaties currently in place, EU institutions can adopt legislation, which, depending on the subject matter, either becomes directly applicable law or requires further implementation by the EU Member States.

The EU’s three main institutions are the Council of the EU (representing the governments of the EU Member States) (the “Council”), the Parliament (elected by and representing the citizens of the EU Member States) and the European Commission (the executive body of the EU). In addition, the European Council, which consists of the heads of state or government of the EU Member States, the European Council President and the President of the European Commission, defines the EU’s overall political direction and priorities. It is not one of the EU’s legislating institutions, but rather sets the EU’s policy agenda, traditionally by adopting conclusions during European Council meetings which identify issues of concern and actions to take.

Article 50 of the Treaty on European Union provides for a mechanism for the voluntary and unilateral withdrawal of an EU Member State from the EU. Pursuant to Article 50, the withdrawal process is initiated by a notification from the EU Member State wishing to withdraw to the European Council. The EU treaties cease to apply to an EU Member State from the later of the date of entry into force of an agreement setting out arrangements for the EU Member State’s withdrawal, or within two years of the notification of the withdrawal. The European Council may, in agreement with the EU Member State concerned, unanimously decide to extend the period beyond two years.

EU Sanctions. Restrictive measures, also known as sanctions, are an essential tool of the EU’s Common Foreign and Security Policy. All restrictive measures adopted by the EU are fully compliant with its obligations under international law, including those pertaining to human rights and fundamental freedoms. The first step in adopting restrictive measures is through a proposal by the High Representative of the Union for Foreign Affairs and Security Policy. The Common Foreign and Security Policy Council resolves thereafter on any restrictive measures by way of a decision binding on EU Member States. Any restrictive measures which include economic or financial sanctions additionally require the adoption of an accompanying Council regulation. Regulations are directly applicable within the EU and are binding on individuals and entities, including economic operators. Decisions and regulations on sanctions must be adopted unanimously by the Council. The regulation defines the precise scope of the measures and details of their implementation. In April 2024, the Council gave final approval to introduce criminal offences and penalties for EU sanctions’ violation. This policy change gained particular traction in the context of Russia’s invasion of Ukraine.

As part of the EU response to Russia’s invasion of Ukraine, the EU adopted a set of comprehensive restrictive measures against Russia and Russian individuals in addition to the prior sanctions that were imposed after the illegal annexation of Crimea in 2014. In addition, sanctions were issued against Belarus in response to their involvement in this invasion and against Iran in relation to the manufacturing and supply of drones as well as North Korea in response to its nuclear- and ballistic missile-related activities and its military support. The sanctions imposed comprise, among others, individual and economic sanctions. In March 2026, 1,985 Russian individuals, including Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, and 687 entities were subjected to an asset freeze and/or a travel ban because their actions undermined Ukraine’s territorial integrity, sovereignty and independence. The lists of sanctioned persons and entities are kept under constant review and are subject to periodic renewals by the Council. The economic sanctions, which target exchanges with Russia and Belarus and Iran in specific economic sectors, include restricted access to EU capital markets for certain Russian banks and companies, a ban on transactions with the Russian Central Bank and the Central Bank of Belarus, a ban of a number of Russian and Belarusian banks from the SWIFT messaging network, a prohibition on the provision of euro-denominated banknotes to Russia and Belarus, a prohibition on the provision of crypto-wallets to Russia, a prohibition on the use the Russian ‘system for Transfer of Financial Messages', a ban on coal and other solid-fossil-fuel imports from Russia, a dynamic price cap related to the maritime transport of crude oil, a ban on use of EU airspace and EU airports by Russian-owned, Russian-registered or Russian-controlled aircraft, a ban on exports to and imports from Russia of raw materials, goods and technology in various sectors, a ban on exports to Russia of dual-use goods, an export and import ban on arms and a prohibition on the provision of certain services to Russia or Russian persons, including the provision of software for the management of enterprises. The EU has introduced a ban on access to EU ports for vessels to prevent the circumvention of sanctions. In December 2025 the Council prohibited the transfers of immobilized Central Bank of Russia assets back to Russia and allowed for an unlimited asset freeze.

Sources: European Commission, Europe in 12 lessons by Pascal Fontaine (https://op.europa.eu/en/publication-detail/-/publication/a5ba73c6-3c6a-11e8-b5fe-01aa75ed71a1); EUR-Lex, Treaties currently in force (https://eur-lex.europa.eu/collection/eu-law/treaties/treaties-force.html); European Council, Council of the European Union, The European Council (https://www.consilium.europa.eu/en/european-council/) EUR-Lex, Consolidated versions of the Treaty on European Union, Article 50 (https://eur-lex.europa.eu/eli/treaty/teu_2016/art_50/oj); European Council, Council of the European Union, Policies, Why the EU adopts sanctions, accessed on March 5, 2026 (https://www.consilium.europa.eu/en/policies/why-sanctions/); European Council, Council of the European Union, Policies, EU sanctions against Russia (https://www.consilium.europa.eu/en/policies/sanctions-against-russia/); European Council, Council of the European Union, Policies, Russia's war of aggression against Ukraine: Council sanctions 9 shadow fleet enablers (https://www.consilium.europa.eu/en/press/press-releases/2025/12/15/russia-s-war-of-aggression-against-ukraine-council-sanctions-9-shadow-fleet-enablers/ ); European Council, Council of the European Union, Policies, EU sanctions against Belarus (https://www.consilium.europa.eu/en/policies/sanctions-against-belarus/); European Council, Council of the European Union, Policies, EU sanctions against Iran (https://www.consilium.europa.eu/en/policies/sanctions-against-iran/); European Council, Council of the European Union, Policies, EU sanctions against North Korea (https://www.consilium.europa.eu/en/policies/sanctions-against-north-korea/); European Commission, EU adopts 18th package of sanctions against Russian (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1840); European Council, Council of the European Union, Council decides to prohibit transfers of immobilised Central Bank of Russia assets back to Russia (https://www.consilium.europa.eu/en/press/press-releases/2025/12/12/council-decides-to-prohibit-transfers-of-immobilised-central-bank-of-russia-assets-back-to-russia/)

Economic Integration

From its inception, the EU has had the fundamental objective, in line with its predecessors, of economic integration of its member states. After a long process, a single market that provides for the free movement of goods and services, persons and capital among the EU Member States was established as of January 1, 1993. The integration of the EU Member States’ economies and the completion of a single market are also promoted by a European competition policy, which aims at creating a level-playing field for EU Member States’ companies, thereby promoting economic efficiency, and by a European consumer policy. In addition, various liberalization and harmonization measures are being implemented, for example in the telecommunication and energy sectors. In the financial sector, the single market has been fostered by providing for the free movement of capital and the freedom to perform banking services throughout the EU under the “single passport,” which enables financial institutions to provide financial services throughout the EU based on a single license obtained in one EU Member State. The EU promotes economic integration with regional aid, which is designed to focus development efforts on certain disadvantaged regions and sections of population of the EU. Another important policy area for the EU has been agriculture and fisheries.

State Aid. EU Member States may generally only grant state aid to companies within the narrow framework of the EU’s regulations and procedures on state aid in order to safeguard a level playing field within the single market. Nevertheless, state aid is permissible for Important Projects of Common European Interest (“IPCEI”) if the European Commission approves that the positive effects of state aid outweigh its distortive effects. IPCEI are large-scale, cross-border projects that address a market failure or systemic challenge by fostering breakthrough innovation or strategic infrastructure with significant benefits for the entire European Union. In addition, to enable EU Member States to support their national economies in the development of clean energy, industrial decarbonization and clean technology, the European Commission adopted a new framework for state aid measures accompanying the Clean Industrial Deal (“Clean Industrial Deal State Aid Framework”) in June 2025. This framework replaced the Temporary Crisis and Transition Framework that was adopted in the context of Russia's invasion of Ukraine. The Clean Industrial Deal State Aid Framework, with a maturity until the end of 2030, provides for several types of aid that may be granted by the EU Member States to accelerate decarbonization and enhance the competitiveness of the European Union. It allows for the provision of liquidity support in the form of state guarantees and subsidized loans, which help ensure that sufficient liquidity remains available to businesses. In particular, state aid may be granted to accelerate the roll-out of renewable energy, to support electricity costs for energy-intensive users and to decarbonize industrial production processes.

The EU Budget and the EU Recovery Instrument. The EU’s expenditures are governed by a long-term budget, also referred to as multiannual financial framework (“MFF”). The MFF is meant to ensure that the EU’s expenditures develop in an orderly manner and within the limits of its own resources. It aims to align spending with policy priorities, to increase predictability of EU finances for co-financers and beneficiaries, to ensure EU budgetary discipline and to facilitate the adoption of the annual EU budget. It sets overall spending limits by determining annual maximum amounts for commitment appropriations, which cover commitments made to spend funds over one or more years in certain expenditure categories and for payment appropriations.

The regulation laying down the MFF of the EU for the years 2021 to 2027 was formally adopted in December 2020. The long-term EU budget provides EUR 1,216 billion (in current prices) in commitment appropriations. The temporary extraordinary Next Generation EU recovery instrument (the “EU Recovery Instrument”) amounts up to EUR 807 billion (in current prices), which is specifically aimed at addressing the socioeconomic consequences of the COVID-19 pandemic. Together with the EUR 64.6 billion to finance EU priorities following the 2024 revisions, this allows the EU to provide an unprecedented amount of approximately EUR 2.07 trillion to help repair the economic and social damage caused by the COVID-19 pandemic in Europe and support the transition towards a modern and more sustainable Europe, including the green and digital transitions. In September 2025 the Commission presented its proposal for the next MFF for the years 2028-2034, amounting to almost EUR 2,000 billion. The new MFF aims to streamline EU funding by consolidating the number of financial programs and increasing flexibility to react faster to unexpected crises. It focuses on boosting European competitiveness through strategic investments in clean technology and simplified national partnership plans for targeted regional impact. Discussions on the proposals have progressed at both technical and political levels in the General Affairs Council, with adoption targeted for the end of 2026.

The most important component of the EU Recovery Instrument is the Recovery and Resilience Facility (“RRF”), with up to EUR 577 billion (in current prices) in loans and grants available to support reforms and investments undertaken by the EU Member States. The balance of the funds under the EU Recovery Instrument is being employed through existing EU instruments and assistance programs. To access the RRF, EU Member States are required to submit national recovery and resilience plans which are assessed by the European Commission and then approved by the Council of the EU on a case-by-case basis. An EU Member State may request further disbursements up to twice a year upon reaching certain agreed milestones and targets. Under the RRF, all milestones must be achieved by 31 August 2026, with the final disbursements by the European Commission to be completed by 31 December 2026. As of March 2026, the European Commission had disbursed EUR 395.5 billion to EU Member States under the RRF, thereof EUR 239 billion were in the form of grants and EUR 156.5 billion in the form of loans. In February 2023, the European Parliament and the Council adopted an amending regulation to include REPowerEU chapters in the RRF. The purpose of REPowerEU is to strengthen the strategic autonomy of the EU by diversifying its energy supplies and ending its dependency on Russian fossil fuel imports in response to the energy crisis of 2022. The 2026 EU budget, which was adopted by the Council and the European Parliament in November 2025, amounts to EUR 192.8 billion in commitment appropriations and EUR 190.1 billion in payment appropriations.

To implement the EU Recovery Instrument, the EU’s Own Resources Decision, which defines how the EU budget is financed and was adopted by the Council on December 14, 2020, pursuant to the special legislative procedure applicable thereto, was ratified by all EU Member States in accordance with their own constitutional requirements. Under the Own Resources Decision, the European Commission is authorized, on an exceptional basis, to temporarily borrow up to EUR 750 billion (in 2018 prices) on the capital markets. In June 2023, the Commission proposed to amend the Own Resources Decision to include revenues from emissions trading, resources generated via the carbon border adjustment mechanism, which aims to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries, and temporary statistical own resources based on company profits. In July 2025 the European Commission proposed to amend the system of own resources by additional resources including an annual lump-sum contribution from companies tax resident in the EU, pending Council approval since then. In first half of 2025, the Commission raised EUR 85.8 billion via long-term EU bonds. While the proceeds from the EU bonds mainly benefited the EU Recovery Instrument, EUR 3.1 billion were used for the disbursement under the Ukraine facility and EUR 7 billion under the macro-financial assistance (MFA) under the G7 ERA initiative. At the end June 2025, the overall outstanding amount of EU bonds reached EUR 661.2 billion, of which EUR 75.1 billion were raised through NextGenerationEU green bonds. In addition, EUR 75.1 billion of short-term debt in EU bills was outstanding. The European Commission has announced plans to issue long-term EU bonds in an amount of EUR 70 billion in second half of 2025, to be complemented by short-term EU bills.

Sources: European Commission, Europe in 12 lessons by Pascal Fontaine (https://op.europa.eu/en/publication-detail/-/publication/a5ba73c6-3c6a-11e8-b5fe-01aa75ed71a1); European Banking Authority, Regulation and policy, Passporting and supervision of branches (https://eba.europa.eu/regulation-and-policy/passporting-and-supervision-branches); European Commission, Competition Policy, State Aid (https://competition-policy.ec.europa.eu/state-aid_en); European Commission, Competition Policy, State Aid, Important Projects of Common European Interest (IPCEI) (https://competition-policy.ec.europa.eu/state-aid/ipcei_en); European Commission, Competition Policy, State Aid, Clean Industrial Deal State Aid Framework (CISAF) (https://competition-policy.ec.europa.eu/about/contribution-clean-just-and-competitive-transition/clean-industrial-deal-state-aid-framework-cisaf_en); European Council, Council of the European Union, Policies, The EU’s annual budget (https://www.consilium.europa.eu/en/policies/eu-annual-budget/); European Council, Council of the European Union, Policies, The EU long-term budget (The EU long-term budget), Timeline - EU long-term budget 2021-2027 (https://www.consilium.europa.eu/en/policies/eu-long-term-budget/timeline-long-term-eu-budget-2021-2027/ );; European Commission, The 2021-2027 EU budget – What’s new? (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/whats-new_en#revision-of-the-eu-budget-2021-2027); European Council, Council of the European Union, The EU long-term budget (https://www.consilium.europa.eu/en/policies/eu-long-term-budget/ );European Commission, Strategy and policy, EU budget, The 2028-2034 EU budget for a stronger Europe (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/eu-budget-2028-2034_en); European Commission, Strategy and policy, Recovery Plan for Europe (https://commission.europa.eu/strategy-and-policy/recovery-plan-europe_en); European Council, Council Decision (EU, Euratom) 2020/2053 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32020D2053); European Union, Proposal for a COUNCIL DECISION on the system of own resources of the European Union and repealing Decision (EU, Euratom) 2020/2053 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52025PC0574&qid=1753797262498 ); European Commission, Revenue, The next generation of EU own resources (https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/revenue/next-generation-eu-own-resources_en); European Commission, Recovery and Resilience Scoreboard(https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/index.html); European Commission, Business, Economy, Euro, Economic recovery, Recovery and Resilience Facility (https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en); European Council, Council of the European Union, EU recovery plan: Council adopts REPowerEU, press release of February 21, 2023 (https://www.consilium.europa.eu/en/press/press-releases/2023/02/21/eu-recovery-plan-council-adopts-repowereu/); European Commission, REPowerEU (https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en); European Council, Council of the European Union, EU budget for 2026 (https://www.consilium.europa.eu/en/policies/eu-annual-budget/2026-budget/); Official Journal of the European Union, Definitive adoption (EU, Euratom) 2025/31 of the European Union’s annual budget for the financial year 2026 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202600072); European Commission, Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010, September 24, 2025 (https://commission.europa.eu/document/download/7338c8a8-7a0d-4bae-8e7c-611503cce235_en?filename=H1%202025%20Half-yearly%20report%20on%20the%20implementation%20of%20borrowing%2C%20debt%20management%20and%20related%20lending%20operations.pdf); European Commission, Half-yearly report on the implementation of borrowing, debt management and related lending operations pursuant to Article 13 of Commission Implementing Decision C(2023)8010, September 24, 2025 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52025DC0588&qid=1773739968125 ).

Trade. The EU is responsible for trade matters with third-party countries. In the area of trade in goods, the EU has exclusive competence. Furthermore, the EU’s responsibilities also cover trade in services, the commercial aspects of intellectual property (such as patents), public procurement and foreign direct investment, whereas in the case of portfolio investments, investment protection and investment dispute settlement, the competence is shared between the EU and the EU Member States.

In particular, the EU is responsible for negotiating and concluding international trade agreements as well as identifying trade barriers and unfair trade practices by trading partners and adopting appropriate countermeasures. Trade agreements are negotiated by the European Commission upon authorization of the Council. Once the European Commission completes negotiations, the Council and the European Parliament examine the final negotiated agreement and decide whether or not to approve it. Trade agreements regulating areas of mixed responsibility between the EU and the EU Member States can only be concluded after ratification by all EU Member States.

As part of the EU’s response to Russia’s Invasion of Ukraine, the EU has imposed comprehensive economic sanctions, including trade restrictions. For more information on the trade restrictions, see “Political Integration—EU Sanctions”.

In December 2024, the European Commission reached a political agreement with the MERCOSUR countries Argentina, Brazil, Paraguay and Uruguay on increasing bilateral trade and investment by lowering tariff and non-tariff trade barriers, by creating more stable and predictable rules for trade and investment, and by fostering the sustainable development of both regions in terms of climate change and social standards. Additionally, the MERCOSUR deal was extended by bilateral safeguards to strengthen protections for EU farmers. On 17 January 2026, the European Union and MERCOSUR signed the Partnership Agreement (EMPA) and the Interim Trade Agreement (iTA). MERCOSUR represents a significant market for the EU, with goods exports amounting to EUR 55.2 billion and EUR 29.2 billion in services. In February 2026, the Commission announced it would proceed with the provisional application of the agreement, as authorized by the Council of the European Union, while the ratification of the agreement by the European Parliament is pending, awaiting a legal opinion from the European Court of Justice.

In January 2026, the EU and India concluded the largest Free Trade Agreement ever concluded by either side. The deal reduces tariffs in value of 96.6% of EU goods exports to India and privileged access to the Indian services market. Trade in services between the EU and India reached EUR 59.7 billion in 2023, up from EUR 30.4 billion in 2020.

The European Union and the United States have the world’s largest bilateral trade, with trade in goods and services of EUR 1.6 trillion (in 2023). Under his “America First” agenda, US President Trump introduced restrictive trade measures on certain European exports during the first half of 2025. However, in July 2025, the EU and the United States reached a trade agreement, reaffirming in a joint statement their commitment to a reciprocal, fair, and balanced trade relationship. The Framework Agreement will now be incorporated into EU law, pending final approval by the European Parliament. Following the United States Supreme Court ruling in February 2026, which declared the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs illegal, the EU paused legislative work on the trade deal. On March 26, 2026 the European Parliament resumed the process under the condition of additional safeguards. These include a “sunrise clause”, ensuring that the EU will reduce tariffs on U.S. imports only when the United States has fulfilled its own commitments.

In March 2026, the European Union and Australia concluded negotiations for a free trade agreement, alongside the adoption of a new security and defense partnership. The deal is the latest addition to the EU's agreements with the strategic Indo-Pacific region. Beyond trade liberalization, the deal secures the EU access to critical raw materials, bolstering the resilience of European supply chains against global instability. The agreement is currently entering the beginning of the ratification process.

Sources: European Commission, EU trade relationships by country/region, Making trade policy (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/making-trade-policy_en);); European Commission, Trade and Economic Security, EU-Mercosur agreement (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement_en); European Commission, Trade and Economic Security, Questions and answers on the EU-Mercosur partnership agreement * (https://ec.europa.eu/commission/presscorner/detail/en/qanda_24_6245); European Commission, Trade, The EU-Mercosur trade agreement (https://commission.europa.eu/topics/trade/eu-mercosur-trade-agreement_en); European Commission, Trade and Economic Security, EU-India agreements (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en); European Commission, EU and India conclude landmark Free Trade Agreement, press release from January 27, 2026 (t); European Commission, Trade and Economic Security, United States (https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en); European Commission, Memo on EU countermeasures on US tariffs, EU countermeasures on US steel and aluminum tariffs explained (https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_750); The White House, President Donald J. Trump on Trade, Fact Sheet, February 13, 2025 (https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-fair-and-reciprocal-plan-on-trade/); The White House, President Donald J. Trump on Trade, Fact Sheet, April 2, 2025 (https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/); European Commission, Statement by President von der Leyen on the deal on tariffs and trade with the United States, press release from July 27, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/statement_25_1915); European Commission, Trade and Economic Security, Joint Statement on a United States-European Union framework on an agreement on reciprocal, fair and balanced trade from August 21, 2025 (https://policy.trade.ec.europa.eu/news/joint-statement-united-states-european-union-framework-agreement-reciprocal-fair-and-balanced-trade-2025-08-21_en); European Parliament, News, EU–US trade legislation: legislative work on hold following US Supreme Court ruling (https://www.europarl.europa.eu/news/en/press-room/20260223IPR36005/eu-us-trade-legislation-legislative-work-on-hold-following-supreme-court-ruling); European Parliament, EU US trade deal: MEPs set conditions for lowering tariffs on US products, press release from March 26, 2026 (https://www.europarl.europa.eu/news/en/press-room/20260323IPR38830/eu-us-trade-deal-meps-set-conditions-for-lowering-tariffs-on-us-products); European Commission, EU and Australia strengthen relations with Security and Defence Partnership and Trade Agreement, press release from March 24, 2026 (https://ec.europa.eu/commission/presscorner/detail/en/ip_26_645); European Commission, Questions and answers on the EU-Australia Trade Agreement (https://ec.europa.eu/commission/presscorner/detail/en/qanda_26_648).

EU Response to the Energy Crisis. Since the fall of 2022, and significantly exacerbated by Russia’s invasion of Ukraine, Europe has been facing an unprecedented energy crisis involving hikes in energy prices and disruptions to energy supply. In response, the EU Member States implemented several measures on the national and supranational levels to ensure affordable and competitive energy for EU consumers, increase the EU’s energy security and preparedness in the event of emergencies, and strengthen the energy resilience and autonomy of EU Member States. In early 2022, the heads of the EU Member States had jointly decided to phase out the EU’s dependency on Russian fossil fuels. In this context, the European Commission initiated the REPowerEU plan discussed above under “—The “EU Budget and the EU Recovery Instrument” put in place the Temporary Crisis and Transition Framework discussed above under “—State Aid”. The joint action was successful. Several European emergency energy rules have therefore ended. For instance, the market correction mechanism, that was intended to limit episodes of extraordinarily high gas prices in the EU, and the emergency regulation for joint purchasing (Aggregate EU) of natural gas have ended. Aggregate EU has since been replaced by a permanent framework within the EU Energy and Raw Materials Platform to facilitate long-term demand aggregation. Other introduced measures have been extended to further secure the gas supply and strengthen energy market resilience , such as the measure for accelerating the deployment of renewable energy and the continuation of coordinated demand-reduction measures for gas. In July 2025, the Council agreed to a two-year extension of the gas reserve filling rules until the end of 2027, while enabling more flexibility to adapt to changing market conditions. In January 2026, the Council reaffirmed its commitment to fully phasing out imports of Russian LNG and pipeline gas by the end of 2026 and autumn 2027, respectively.

Sources: European Council, Council of the European Union, Policies, Energy prices and security of supply, accessed on May 3, 2024 (https://www.consilium.europa.eu/en/policies/energy-prices-and-security-of-supply); European Commission, Energy, Actions and measures of energy supply (https://energy.ec.europa.eu/topics/markets-and-consumers/actions-and-measures-energy-prices_en#accelerating-renewables-permitting); European Council, Council of the European Union, Gas storage: Council greenlights 2-year extension of reserves filling rules to safeguard winter supply (https://www.consilium.europa.eu/en/press/press-releases/2025/07/18/gas-storage-council-greenlights-2-year-extension-of-reserves-filling-rules-to-safeguard-winter-supply/).

European Defense. The changed security situation in Europe at the beginning of 2025 prompted the EU to strengthen its defense capabilities and enhance the readiness of the European defense industry over the long term. In March 2025 the European Commission and the High Representative for Foreign Affairs published a White Paper for European Defense that sets out a vision to significantly foster European defense readiness. The White Paper is backed by the ReArm Europe Plan/Readiness 2030. The Plan outlines measures for mobilizing up to EUR 800 billion to support the defense investments of EU Member States. For creating a fiscal space of up to EUR 650 billion on the EU Member State level the Commission called for a coordinated activation of the national escape clause. See “EU Economic Governance – Stability and Growth Pact”. In May 2025 the Council adopted a new EU financial instrument called Security Action for Europe (“SAFE”) that is supposed to provide EU Member States with up to EUR 150 billion of loans backed by the headroom of the EU budget. The funds will be raised by the EU on capital markets to offer EU Member States loans with advantageous financing terms. SAFE is intended to support member states in making rapid and significant increases in their defense investments through common procurement. In February 2026, the Council authorized SAFE defense funding for 16 EU member states making EUR 14.4 billion available of pre-financing. As of March 2026, the Council is evaluating the national defense investment plans for another three countries. In addition, private capital will be mobilized by accelerating the Savings and Investment Union and through the European Investment Bank to support European rearmament. In addition, the Commission proposed in June 2025 a Defense Readiness Omnibus. This package contains measures that will help simplify rules to speed up the development of defense capabilities and infrastructure by Member States and industry awaiting enforcement. In December 2025, the Council adopted the European Defense Industry Program (EDIP) providing EUR 1.5 billion in EU grants for the period 2025-2027. EU member states have significantly increased their defense expenditure to EUR 381 billion in 2025, representing 2.1% of EU’s GDP — up from 1.9% in 2024.

Sources: European Commission, Future of European Defense, Acting on defence to protect Europeans (https://commission.europa.eu/topics/defence/future-european-defence_en); European Commission, Press statement by President von der Leyen on the defence package, press release from March 4, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/statement_25_673); European Council, Council of the European Union, Security Action for Europe (SAFE) (https://www.consilium.europa.eu/en/policies/safe/); European Commission, Commission unveils Savings and Investments Union strategy to enhance financial opportunities for EU citizens and businesses, press release from March 19, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_802); European Council, Council of the European Union, European defence readiness(https://www.consilium.europa.eu/en/policies/european-defence-readiness/); European Council, Council of the European Union, EU defence in numbers (https://www.consilium.europa.eu/en/policies/defence-numbers/); European Council, Council of the European Union, SAFE: Council clears path for financial assistance to eight member states and concluding the Canada agreement (https://www.consilium.europa.eu/en/press/press-releases/2026/02/11/safe-council-clears-path-for-financial-assistance-to-eight-member-states-and-concluding-the-canada-agreement/)

Monetary Integration

The Federal Republic is a signatory to and has ratified the Treaty on European Union of February 1992 (also known as the “Maastricht Treaty”). The Maastricht Treaty was the basis for the establishment of the European Economic and Monetary Union (“EMU”). The EMU led, in turn, to the adoption of irrevocable conversion rates between the euro and the national currencies of the initial participating member states on December 31, 1998, and the introduction of the euro as the single European currency in the euro area on January 1, 1999. On January 1, 2002, banknotes and coins denominated in euro were introduced as legal tender to replace the national currencies in the twelve member states forming the euro area at that time (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain). Slovenia, Malta, Cyprus, Slovakia, Estonia, Latvia, Lithuania and Croatia subsequently joined the euro area. On January 1 2026, Bulgaria joined as newest member the euro area.

The ECB was established on June 1, 1998, as part of the European System of Central Banks (“ESCB”). According to the Maastricht Treaty, the primary objective of the ESCB is to maintain price stability. Without prejudice to the objective of price stability, the ESCB supports the general economic policies of the EU. See “— Monetary and Financial System” for more information on the ECB and ESCB as well as on the European financial system. The Eurosystem, consisting of the ECB and the national central banks of those EU Member States whose currency is the euro (“Euro Area Member States”), assumed sole responsibility for the monetary policy in the euro area on January 1, 1999.

Sources: European Union, Principles, countries, history, Principles and values, Founding agreements, Treaty on European Union – Maastricht Treaty (https://european-union.europa.eu/principles-countries-history/principles-and-values/founding-agreements_en); European Central Bank, About us, Our history, arts and culture, Our history, Economic and Monetary Union (EMU) (https://www.ecb.europa.eu/ecb/history-arts-culture/history/emu/html/index.en.html); European Central Bank, The euro, Our money (https://www.ecb.europa.eu/euro/intro/html/index.en.html); European Central Bank, Monthly Bulletin, 10th Anniversary of the ECB (https://www.ecb.europa.eu/pub/pdf/other/10thanniversaryoftheecbmb200806en.pdf).

EU Economic Governance

The EU economic governance framework aims to detect, prevent and correct problematic economic trends such as excessive government deficits or public debt levels, which can stunt growth and put economies at risk. The framework consists of the following main components.

Stability and Growth Pact. To strengthen the monitoring and coordination of national fiscal and economic policies, the EU Member States established the Stability and Growth Pact (“SGP”) in 1997. In February 2024, the European Parliament and Council agreed to reform the economic governance rules of the SGP, based on a March 2023 proposal by the European Commission. The main objective of the new framework is to strengthen the EU Member States’ sound finances, debt sustainability and promote sustainable and inclusive growth. Under the new framework, EU Member States are given a timeframe within which, through a combination of fiscal adjustment, growth-enhancing reforms and priority investments, their debt level is to be put on a sufficiently downward path. The SGP reference values of 3% for the GDP budget deficit and 60% for the GDP debt level remain in force. The new rules were adopted by the Parliament on April 23, 2024 and by the Council of the EU on April 29, 2024. They came into effect with their publication in the Official Journal of the EU on April 30, 2024.

As of 2025, fiscal surveillance is fully governed by the reformed framework, with the newly established medium-term fiscal-structural plans and their respective net expenditure paths serving as the primary basis for monitoring and enforcement.

The new framework requires EU Member States to set up a medium-term fiscal-structural plan for the next four or five years, the so-called adjustment period is extendable to up to seven years. The net expenditure path is intended to be the single operational indicator for the national plans. After the initial submission of the medium-term fiscal structural plans, the plans will be assessed by the European Commission and endorsed by the Council. Every April, EU Member States will be required to submit a progress report on the medium-term structural plan, which replaces the Stability and Convergence Programmes of the SGP. In addition, to ensure the coordination of fiscal policies among Euro Area Member States, governments are required by European economic governance rules to submit their draft budgetary plans for the following year to the European Commission by October 15 of each year. The European Commission will then assess whether the Members States’ draft budgetary plans are consistent with their net expenditure paths, pursuant to the new regulation.

The preventive arm of the SGP binds EU Member States to their commitments towards sound fiscal policies. In this respect the new framework introduces risk-based surveillance which differentiates between EU Member States and their fiscal situation. For EU Member States with a government deficit greater than 3% of GDP or a public debt level greater than 60% of GDP, the European Commission will issue a country-specific “reference trajectory” and a corresponding level of the structural primary balance to be reached by the end of the adjustment process. This primary structural balance target is defined as the cyclically adjusted general government balance net of temporary measures and net of interest expenditure. Quantitative safeguards are intended to ensure declining debt and to provide a safety margin below the Maastricht Treaty deficit reference value of 3% of GDP in order to create fiscal buffers. Thus, the new rules replace the 1/20 debt reduction requirement for EU Member States with a debt level above 60% of GDP.

The corrective arm of the SGP consists of the excessive deficit procedure (“EDP”). The EDP ensures the correction of excessive budget deficits (defined as a deficit greater than 3% of GDP), excessive public debt levels (defined as a debt ratio greater than 60% of GDP without an adequate diminishing trend) or excessive control account deviations (defined as deviations from the “reference trajectory” in the EU Member State’s net expenditure). EU Member States that fail to respect the SGP’s preventive or corrective rules may ultimately face sanctions. For Euro Area Member States, these could take the form of warnings and financial sanctions including fines. In addition, all EU Member States could face a suspension of commitments or payments from the EU’s structural and investment funds if they fail to abide by the corrective rules. The SGP contains rules for exceptional situations. In particular, in case of an unusual event outside the control of the EU Member State concerned, which has a major impact on the financial position of its general government, or in periods of severe economic downturn for the euro area or the EU as a whole, upon proposal of the European Commission and endorsement of the Council, EU Member States are allowed to depart from the budgetary requirements that would normally apply, provided that this does not endanger fiscal sustainability in the medium-term. When applied in the case of a severe economic downturn for the euro area or the EU as a whole, this rule is referred to as the “general escape clause.”

The “general escape clause” under the SGP was deactivated at the end of 2023, after having been activated in March 2020 to permit EU Member States to deal adequately with the effects of the COVID-19 pandemic and extended in May 2022 after Russia’s invasion of Ukraine created downside risks to economic activity. As of March 2026, Austria, Belgium, Finland, France, Italy, Malta, Poland, Slovakia, Hungary and Romania are subject to an ongoing excessive deficit procedure.

In the context of the European Commission’s ReArm Europe Plan/ Readiness 2030 the Commission invited the EU Member States to activate the national escape clause to accommodate increased defense expenditure within the SGP on March 19, 2025. The National Escape Clause allows an EU Member State to deviate from its net expenditure path as set by the Council in the context of its medium-term fiscal structural plan. The coordinated activation limits the deviation to up to a maximum of 1.5% of GDP for each year for a period of up to four years for defense related expenditure. According to the Commission’s proposal, EU Member States’ excess expenditure for defense takes into account the increase in defense expenditure since 2021. As of March 2026, the Council activated the flexibility in EU fiscal rules to increase defense spending for Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, Slovenia, Germany and Austria. See also “—European Defense” and “—Public Finance—Germany’s General Government Deficit/Surplus and General Government Gross Debt.”

Sources: European Commission, Economy and Finance, Economic and fiscal governance (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance_en); European Commission, Commission welcomes political agreement on a new economic governance framework fit for the future, press release of February 10, 2024 (https://ec.europa.eu/commission/presscorner/detail/en/ip_24_711); European Commission, Regulation of the European Parliament and the Council on the effective coordination of economic policies and the multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52023PC0240); European Commission, Vade Mecum on the Stability & Growth Pact 2019 edition, pages 25 and 44 (https://economy-finance.ec.europa.eu/system/files/2019-04/ip101_en.pdf); European Commission, Fiscal policy guidance for 2024: Promoting debt sustainability and sustainable and inclusive growth, press release of March 8, 2023 (https://ec.europa.eu/commission/presscorner/detail/%20en/ip_23_1410); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, Annual draft budgetary plans (DBPs) of euro area countries (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/annual-draft-budgetary-plans-dbps-euro-area-countries_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, The preventive arm (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/preventive-arm_en); European Commission, Economy and Finance, Economic and fiscal governance, Stability and Growth Pact, The corrective arm / Excessive Deficit Procedure (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/corrective-arm-excessive-deficit-procedure_en); European Council, Council of the European Union, Statement of EU ministers of finance on the Stability and Growth Pact in light of the COVID-19 crisis, press release of March 23, 2020 (https://www.consilium.europa.eu/en/press/press-releases/2020/03/23/statement-of-eu-ministers-of-finance-on-the-stability-and-growth-pact-in-light-of-the-covid-19-crisis/); European Commission, 2022 European Semester - Spring Package, Communication from the Commission of May 23, 2022 (https://commission.europa.eu/system/files/2022-05/2022_european_semester_spring_package_communication_en.pdf); European Parliament, New EU fiscal rules approved by MEPs, press release of April 23, 2024 (https://www.europarl.europa.eu/news/en/press-room/20240419IPR20583/new-eu-fiscal-rules-approved-by-meps); European Council, Council of the European Union, Economic governance review: Council adopts reform of fiscal rules, press release of April 29, 2024 (https://www.consilium.europa.eu/en/press/press-releases/2024/04/29/economic-governance-review-council-adopts-reform-of-fiscal-rules/); EUR-Lex, Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/eli/reg/2024/1263/oj); EUR-Lex, Council Regulation (EU) 2024/1264 of 29 April 2024 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (https://eur-lex.europa.eu/eli/reg/2024/1264/oj); EUR-Lex, Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements for budgetary frameworks of the Member States (https://eur-lex.europa.eu/eli/dir/2024/1265/oj); European Commission, Commission unveils the White Paper for European Defence and the ReArm Europe Plan/Readiness 2030, press release of March 19, 2025 (https://ec.europa.eu/commission/presscorner/detail/en/ip_25_793); European Commission, Communication from the Commission (https://defence-industry-space.ec.europa.eu/document/download/a57304ce-1a98-4a2c-aed5-36485884f1a0_en?filename=Communication-on-the-national-escape-clause.pdf); European Council, Council of the European Union, National escape clause for defence expenditure (https://www.consilium.europa.eu/en/policies/national-escape-clause-for-defence-expenditure-nec/).

Macroeconomic Imbalance Procedure. Established in 2011, the macroeconomic imbalance procedure (“MIP”) is a surveillance mechanism for the EU and the EU Member States that aims to identify potential economic risks early on, prevent the emergence of harmful macroeconomic imbalances and correct any existing excessive imbalances. EU Member States’ medium-term fiscal-structural plans described above under “—Stability and Growth Pact” are required to ensure the delivery of investments and reforms to correct the imbalances identified under the MIP. The preventive arm of the procedure relies on an early warning system that uses a scoreboard of indicators and in-depth country reviews. This preventive arm allows the European Commission and the Council to provide preventive recommendations to the respective EU Member State at an early stage. In case of an EU Member State with excessive macroeconomic imbalances, the corrective arm may open an excessive imbalance procedure, under which the EU Member State concerned will have to submit a revised fiscal-structural plan and regular progress reports. The enforcement regime within the corrective arm comprises the option of imposing financial sanctions for Euro Area Member States, including fines of up to 0.1% of such Euro Area Member State’s GDP, if a Euro Area Member State repeatedly does not comply with its obligations.

In the 2025 surveillance cycle, seven EU Member States, excluding Germany, were found to be experiencing imbalances or excessive imbalances. Consequently, during the 2026 surveillance cycle, these EU Member States, and additionally Estonia will be subject to an in-depth review in the context of the MIP (see also “—Stability and Growth Pact” and “—The Economy—International Economic Relations—Germany’s Current Account Surplus and the Macroeconomic Imbalance Procedure”).

Sources: European Commission, Economy and Finance, Economic and fiscal governance, Macroeconomic Imbalance Procedure, Dealing with macroeconomic imbalances (https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/macroeconomic-imbalance-procedure/dealing-macroeconomic-imbalances_en); European Commission, Publications, 2026 European Semester: Alert Mechanism report (https://commission.europa.eu/publications/2026-european-semester-alert-mechanism-report_en ); European Commission, Regulation of the European Parliament and the Council on the effective coordination of economic policies and the multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52023PC0240).

Financial Assistance in the EU

EU countries experiencing or threatened by financing difficulties can request access to several financial assistance mechanisms. The main ones are described below.

Temporary Financial Stability Mechanism. In May 2010, the EU and Euro Area Member States established a temporary stability mechanism to safeguard the financial stability amid severe tensions in euro area sovereign debt markets, consisting of the European Financial Stabilisation Mechanism (“EFSM”) and the European Financial Stability Facility (“EFSF”). Through the EFSM the European Commission is allowed to borrow up to a total of EUR 60 billion on behalf of the EU under an implicit EU budget guarantee. The EFSF was created as a temporary institution and since July 1, 2013 no longer engages in new financing programs. As of March 2026, the EFSF had outstanding loans to Ireland, Portugal and Greece of approximately EUR 163 billion. Debt securities issued by the EFSF to finance these loans are backed by irrevocable and unconditional guarantees and over-guarantees extended by the Euro Area Member States. The Federal Republic accounts for approximately 29% of the guarantees according to the contribution key. The EFSF will be dissolved and liquidated when all financial assistance provided to Euro Area Member States and all funding instruments issued by the EFSF have been repaid in full.

Sources: European Commission, Economy and Finance, EU financial assistance, How is financial assistance provided?(https://economy-finance.ec.europa.eu/eu-financial-assistance/how-financial-assistance-provided_en); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Financial Stabilisation Mechanism (EFSM) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-financial-stabilisation-mechanism-efsm_en); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Financial Stability Facility (EFSF) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-financial-stability-facility-efsf_en); European Stability Mechanism, Financial Assistance, Programme Database, Programme Overview (https://www.esm.europa.eu/financial-assistance/programme-database/programme-overview); European Stability Mechanism, Explainers, Guarantees by EFSF Countries (https://www.esm.europa.eu/about-us/explainers#guarantees-by-efsf-countries).

European Stability Mechanism. Since October 2012, the European Stability Mechanism (“ESM”), which was established as an intergovernmental organization under public international law by the Euro Area Member States, has been assisting in preserving the financial stability of the EMU. As of July 1, 2013, it assumed the tasks fulfilled by the EFSF and the EFSM and is currently the primary support mechanism for Euro Area Member States experiencing or threatened by severe financing problems, if such assistance is deemed essential to safeguard financial stability in the euro area as a whole. The ESM issues bonds or other debt instruments on the financial markets to raise capital to provide assistance, subject to certain conditions, to Euro Area Member States. Unlike the EFSF, which is based upon guarantees by Euro Area Member States, the ESM has total subscribed capital of EUR 708.5 billion provided by Euro Area Member States, which provides it with a lending capacity of EUR 500 billion. EUR 81 billion of the ESM’s subscribed capital is in the form of paid-in capital with the balance of EUR 627.5 billion being callable capital. The contribution of each Euro Area Member State is based on the paid-in capital for the ECB. On this basis, the Federal Republic’s contribution amounts to approximately 27% of the aggregate contributions to the ESM. The Federal Republic contributed approximately EUR 22 billion of paid-in capital to the ESM.

Financial assistance from the ESM is activated upon a request from a Euro Area Member State to the chairperson of the ESM’s board of governors and is provided subject to strict conditions appropriate to the instrument chosen. The initial instruments available to the ESM have been modeled upon those available to the EFSF and include the extension of loans to a Euro Area Member State in financial difficulties, interventions in the primary and secondary debt markets, action based on a precautionary program, and the extension of loans to governments, or since December 2014 directly to affected financial institutions, for the purposes of recapitalizing financial institutions. Each instrument is to be linked to a memorandum of understanding which sets forth the conditions for financial support as well as the monitoring and surveillance procedures established to ensure the Euro Area Member State is progressing towards financial stability. In principle, decisions under the ESM are taken by mutual agreement. However, in the event that the European Commission and the ECB conclude that an urgent decision related to financial assistance is needed because the financial and economic sustainability of the euro area is threatened, the mutual agreement rule is replaced by a qualified majority of 85%. Given its voting rights of approximately 27%, the Federal Republic may veto any decision even under the emergency voting rule. As of March 2026, the ESM had loans in an aggregate principal amount of approximately EUR 72 billion outstanding to Spain, Cyprus and Greece.

Sources: European Stability Mechanism, Who we are, History (https://www.esm.europa.eu/about-us/history); European Commission, Economy and Finance, EU financial assistance, Euro area countries, European Stability Mechanism (ESM) (https://economy-finance.ec.europa.eu/eu-financial-assistance/euro-area-countries/european-stability-mechanism-esm_en); European Stability Mechanism, Who we are (https://www.esm.europa.eu/about-us#headline-who_we_are); European Stability Mechanism, Explainers, The ESM, Capital Structure (https://www.esm.europa.eu/about-us/explainers#capital-structure); European Stability Mechanism, How we decide, ESM shareholders and their representatives in governing and oversight bodies (https://www.esm.europa.eu/about-us/governance#sharesandcapital); ); European Stability Mechanism, Explainers, The ESM, Basic information (https://www.esm.europa.eu/about-us/explainers#basic-information); European Stability Mechanism, Financial Assistance, Financial assistance instruments, Lending toolkit (https://www.esm.europa.eu/financial-assistance/lending-toolkit); European Stability Mechanism, Explainers, Lending, Policy conditions attached to loans (https://www.esm.europa.eu/about-us/explainers#are-policy-conditions-always-tied-to-esm-loans-); European Stability Mechanism, Explainers, The ESM, ESM decision making (https://www.esm.europa.eu/about-us/explainers#esm-decision-making); European Stability Mechanism, Financial Assistance, Programme Database, Programme Overview (https://www.esm.europa.eu/financial-assistance/programme-database/programme-overview).

On January 27 and February 8, 2021, the Euro Area Member States signed an agreement amending the treaty establishing the ESM. The reform establishes a common backstop to the Single Resolution Fund (“SRF”) in the form of a credit line from the ESM to replace the direct recapitalization instrument for financial institutions, providing a financial safety net for bank resolutions in the European banking union (the “Banking Union”), which will help to protect financial stability (see “—Monetary and Financial System—Financial System— European Financial System—European System of Financial Supervision and European Banking Union” for more information on the Banking Union and the SRF). The maximum amount of ESM loans to the SRF is set at EUR 68 billion. The credit line may only be used as a last resort and to the extent that it is fiscally neutral in the medium term, i.e., it is repaid through ex-post contributions by banks over a period of three to five years. Moreover, the revised ESM Treaty envisages the introduction of single-limb collective action clauses for bonds with maturities of more than a year issued by governments of Euro Area Member States, which, if required, would facilitate orderly and predictable sovereign debt restructuring. Furthermore, the reformed ESM Treaty enables the ESM to have a stronger role in future economic adjustment programs and crisis prevention. The reform clarified that ESM precautionary instruments provide support to Euro Area Member States with sound fundamentals that could be affected by an adverse shock beyond their control in order to safeguard the financial stability of the euro area as a whole. The enforcement of the reformed ESM Treaty however remains pending, until the parliaments of all Euro Area Member States have ratified the reformed ESM Treaty.

Sources: ESM, About us, ESM Reform (https://www.esm.europa.eu/about-esm/esm-reform); ESM, About ESM, ESM Treaty Reform - Explainer (https://www.esm.europa.eu/about-esm/esm-treaty-reform-explainer#ui-id-5); European Union, Terms of Reference of the 2022 CAC (https://economic-financial-committee.europa.eu/system/files/2021-04/EA%20Model%20CAC%20-%20Draft%20Terms%20of%20Reference.pdf); ESM, ESM Treaty Reform – Explainer (https://www.esm.europa.eu/about-us/esm-reform/esm-treaty-reform-explainer); European Council, Council of the European Union, Documents & Publications, Agreement Amending the Treaty Establishing the European Stability Mechanism (ESM) (https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2019035&DocLanguage=en).

Statistical Standards

Statistical Standard for the National Accounts

Since August 2014, the Federal Statistical Office has been calculating the German national accounts in accordance with the European System of National and Regional Accounts 2010 (ESA 2010) which, in turn, is based on the System of National Accounts (SNA 2008) of the United Nations. In 2024, a major revision of the National Accounts, harmonized Europe-wide, took place in Germany. The main purpose of the revision was to refine results by introducing new data sources, a new classification of private consumption expenditure and new calculation methods. The entire national accounting system was reviewed and revised and, where necessary, new findings were integrated into the calculations. To avoid breaks in time series, the results for Germany were recalculated from 1991 onwards. The revised results were published for the first time in July 2024.

Sources: Statistisches Bundesamt, National Accounts, ESA 2010 methods and sources for the German GNI and its components, published on April 6, 2022 (https://www.destatis.de/EN/Themes/Economy/National-Accounts-Domestic-Product/Publications/Downloads-National-Accounts-Domestic-Product/esa-2010-methods.html?nn=214136 ); Statistisches Bundesamt, National accounts, domestic product, Major Revision of National Accounts 2024 (https://www.destatis.de/EN/Themes/Economy/National-Accounts-Domestic-Product/InfoRevision2024.html).

Statistical Standard for the Balance of Payments

Since July 2014, the methodological concept of the German balance of payments statistics follows the sixth edition of the Balance of Payments and International Investment Position Manual (“BPM6”), the revised standard of the IMF. The application of BPM6 is binding for EU Member States by virtue of a regulation adopted by the European Commission. Balance of payments data since 1971 have been recalculated in accordance with BPM6. In July 2025 the IMF released the seventh edition of the Balance of Payments and International Investment Position Manual. Within the EU it is planned for its Member States to apply the new standards in the balance of payments in 2029.

Source: Bundesbank, Statistics, External Sector, Balance of Payments, Methodological notes (https://www.bundesbank.de/en/statistics/external-sector/balance-of-payments/methodological-notes-794532); International Monetary Fund, Release of New Standards for Macroeconomic Statistics (BPM7) (https://www.imf.org/en/publications/policy-papers/issues/2025/07/10/release-of-new-standards-for-macroeconomic-statistics-bpm7-568453); Bundesbank, Update of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6)( https://www.bundesbank.de/en/statistics/external-sector/external-sector/update-of-the-sixth-edition-of-the-balance-of-payments-and-international-investment-position-manual-bpm6--845666).

Statistical Disclosure Standards of the International Monetary Fund

Since February 2015, the Federal Republic has met the Special Data Dissemination Standard Plus (“SDDS Plus”) of the IMF relating to coverage, periodicity and timeliness of economic data. The SDDS Plus was created in 2012 as an extension of the existing Special Data Dissemination Standard. By providing comparable economic and financial data, it is designed to improve the transparency of the financial sector and its international interdependencies and thus contributes to the identification of risks at an early stage. Although adherence by member countries to the SDDS Plus is voluntary, it carries a commitment requiring members to observe the standard and to provide certain information to the IMF about their practices in disseminating economic and financial data.

Source: Bundesbank, Statistics, Set of indicators, SDDS Plus (Special Data Dissemination Standard) (https://www.bundesbank.de/en/statistics/sets-of-indicators/sdds-plus/sdds-plus-795798).

THE ECONOMY

Overview

Since 1945, the Federal Republic’s economic system has developed into a social market economy, combining the free initiative of the individual with progressive social principles. The Grundgesetz guarantees freedom of private enterprise and private property, provided that these basic rights are not exercised against the public good. The state mainly has a regulatory function in the market economy, setting the general framework of conditions within which market processes take place.

Key Economic Figures

The German economy is one of the world’s largest economies, with an annual GDP of EUR 4,469.9 billion in 2025. In 2025, price-adjusted GDP increased by 0.2% against the backdrop of Russia’s ongoing invasion of Ukraine and the tariffs imposed by the US. Compared to the level of 1991, which represents the first full year after German reunification on October 3, 1990, price-adjusted GDP increased by 48.3%. Productivity gains contributed to the growth in price-adjusted GDP since 1991, given that price-adjusted GDP per employee has risen by 25.4% since 1991. In calculating price-adjusted GDP, the Federal Statistical Office (Statistisches Bundesamt) uses a chain index based on the previous year’s prices. In 2025, the GDP per capita at current prices was EUR 53,516 while the GDP per person employed at current prices was EUR 97,210.

Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 2.1.1 and 2.1.4.

As in many advanced economies, the services sector of the Federal Republic has become the largest contributor to GDP (in terms of gross value added). In 2025, services accounted for 71.2% of gross value added, measured at current prices, compared to 62.2% in 1991. The two most important subsectors were “trade, transport, accommodation and food services,” accounting for 16.6% in 2025, compared to 16.1% in 1991, and “public services, education, health,” accounting for 20.5% of gross value added in 2025, compared to 16.3% in 1991. The production sector (excluding construction) generated 22.9% of gross value added compared to 30.6% in 1991. Construction contributed 4.9% to gross value added in 2025, compared to 6.1% in 1991, and agriculture, forestry and fishing accounted for 1.2% of gross value added in 2024, compared to 1.0% in 1991.

Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 3.2.1

In 2025, private final consumption expenditure totaled 53.2%, gross capital formation amounted to 20.3% and government final consumption expenditure equaled 22.5%, in each case of GDP at current prices. Exports and imports of goods and services accounted for 40.4% and 38.1% of GDP at current prices, respectively. In 2022, Germany’s trade surplus decreased substantially because of the deterioration of terms of trade as a result of Russia’s invasion of Ukraine. In 2023, the trade surplus rebounded substantially and was almost as high as in 2021. In 2025, the trade balance (according to national accounts) showed a surplus equal to 2.4% of GDP (2024: 3.8% of GDP).

Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Table 2.3.1.

Russia’s invasion of Ukraine at the end of February 2022 and the subsequent extreme rise in energy prices and its knock-on effects on consumer price inflation have dampened economic activity in Germany. The tariffs imposed by the US on Germany since April 2025 have also had a noticeable negative impact. In 2025, annual price-adjusted GDP was 0.2% higher than in 2024. Household final consumption expenditure increased by a price-adjusted 1.6% compared to 2024. Exports decreased by 0.4%, while imports increased by 3.6%, all on a price-adjusted basis. Accordingly, the growth contribution of net exports was -1.5 percentage points. Gross fixed capital formation decreased by 0.2%, in price-adjusted terms. Government final consumption expenditure increased by 0.3% on a price-adjusted basis.

Source: Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – Detaillierte Jahresergebnisse (March 2026), Tables 2.3.2.

The annual average rate of registered unemployment (as computed under the “national definition” of the Federal Employment Agency (Bundesagentur für Arbeit) increased from 6.0% in 2024 to 6.3% in 2025. Based on the internationally comparable method of calculation promulgated by the International Labour Organization (“ILO”), which is referred to as the “ILO definition,” the annual average unemployment rate increased from 3.1% in 2024 to 3.5% in 2025. For an explanation of the differences between the national definition and the ILO definition, see “—Employment and Labor.” Inflation as measured by the percentage change in the national consumer price index (“CPI”) was 2.2% in 2025, the same as in 2024. General government gross debt stood at EUR 2,838.2 billion at year-end 2025, compared to EUR 2,693.8 billion at year-end 2024.

Sources: Bundesagentur für Arbeit, Tabellen, Arbeitslosigkeit im Zeitverlauf: Entwicklung der Arbeitslosenquote (Jahreszahlen) 2025, Tabelle 2.1, (https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?nn=1610104&topic_f=laender-heft); Statistisches Bundesamt, Fachserie 18, Reihe 1.4 – 2025 (March 2026), Table 3.1.2 and Table 2.1.10; Deutsche Bundesbank, Time Series BBGFS1.A.BJ9059, General government debt as defined in the Maastricht Treaty - Germany – overall.

The following table shows selected key economic figures for the Federal Republic for each of the years indicated.

Key Economic Figures

Sources: Statistisches Bundesamt, Fachserie 18, Reihe 1.2 - 4. Vierteljahr 2025 (February 2026), Tables 1.1 and 1.11; Statistisches Bundesamt, Consumer price indices, Consumer price index - overall index and by 12 divisions, Change on previous year (https://www.destatis.de/EN/Themes/Economy/Prices/Consumer-Price-Index/Tables/Consumer-prices-12-divisions.html#242118); Deutsche Bundesbank, Balance of payments statistics, 14-03-2025, Table I. Major items of the balance of payments (https://www.bundesbank.de/resource/blob/810958/da8cfebd71cf676ea6ee3046fd5f9fb2/472B63F073F071307366337C94F8C870/i-wichtige-posten-data.pdf); Deutsche Bundesbank, Statistics, General government debt as defined in the Maastricht Treaty - Germany - overall (https://www.bundesbank.de/dynamic/action/en/statistics/time-series-databases/time-series-databases/745582/745582?listId=www_v27_web011_21a&tsId=BBGFS1.A.BJ9059&dateSelect=2023).

Economic Outlook

The economic situation in Germany has clouded over in recent months. At the beginning of the year, the economy already showed signs of cooling. By the end of the first quarter, the military conflict in the Middle East and the related restrictions on commercial shipping through the Strait of Hormuz had led to shortages and price increases for energy and other commodities, affecting businesses and private households in Germany. Against this background, the federal government now expects only a modest rise in real gross domestic product (GDP) of 0.5 percent for the current year. Assuming the conflict eases soon, these headwinds should gradually diminish later in the year, allowing fiscal impulses to become noticeable. Real GDP is projected to grow by 0.9 percent in 2027, and inflation is expected at 2.7 percent this year and 2.8 percent next year.

In addition to the conflict in the Middle East, international trade is also being burdened by protectionist measures and fragmentation. German export performance remains weak, partly due to reduced competitiveness. The recovery of the German economy is therefore being driven primarily by domestic demand. With rising real incomes, private consumption continues to support the German economy despite the erosion of purchasing power caused by energy price shocks resulting from the conflict in the Middle East. Fiscal impulses are likely to stimulate gross investment, while government spending, especially on infrastructure and defense, is likely to contribute to overall economic revival. Further economic development depends largely on how the conflict in the Middle East evolves and is subject to considerable uncertainty.

Sources: Bundesministerium für Wirtschaft und Klimaschutz, Pressemitteilung, Geopolitische Krisen verzögern Erholung – Frühjahrsprojektion der Bundesregierung, April 22, 2026 (https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Pressemitteilungen/2026/04/geopolitische-krisen-verzoegern-erholung.html)

General Economic Policy

The Federal Government views structural reforms as central to strengthening Germany’s economic recovery and growth potential. To this end, it is pursuing six interrelated core priorities: First, cutting unnecessary bureaucracy to foster new economic dynamism, aiming for more efficient regulatory frameworks without lowering important standards. Second, safeguarding fiscal sustainability by prioritizing investments and reviewing subsidies for effectiveness. Third, strengthening intergenerational fairness by improving opportunities for upward mobility and participation, including for skilled workers from abroad. Fourth, promoting equal living conditions, especially by supporting structurally weak regions, to secure social cohesion and acceptance of the social market economy. Fifth, closer integration of economic and security policy and further development of industrial policy to increase resilience to international risks and technological autonomy. Sixth, strengthening Europe as a common economic area by removing market barriers, advancing trade agreements, and protecting against unfair practices.

Given a sizeable investment backlog, a need to expand defense spending and a considerable underutilization of the economy, constitutional amendments and the establishment of the Special Fund for Infrastructure and Climate Neutrality (SVIK) in March 2025 have expanded fiscal room for maneuver. An investment initiative has been launched focusing on transport, digital, energy, and hospital infrastructure as well as housing. For 2026, significant increases in investment and various relief measures for energy and transmission costs are planned to provide cyclical stimulus. Improvements to the tax system and an investment-promoting package of measures are strengthening Germany as a business location and are intended to incentivize private investment. In parallel, reform commissions are being set up to further improve location conditions for businesses in a targeted way.

The Federal Government aims for clear, targeted, and efficient regulation and intends to regularly evaluate existing regulations to limit lawmaking processes to what is essential. Planning and permitting procedures are to be accelerated, for example through a reconfiguration of federal relations and a reform of procedural law. Regarding tax-funded social benefits, the government’s Commission on Welfare State Reform has developed proposals for modernization and cutting red tape.

Public infrastructure is a decisive locational factor but in recent years has been burdened by deficiencies and investment backlogs. With the Special Fund for Infrastructure and Climate Neutrality, the federal government is providing €500 billion for the modernization of public infrastructure, thereby relying on comprehensive monitoring, expedited approvals, and partnerships with states and municipalities. In addition, private investment is to be stimulated, for example via the Germany Fund (Deutschlandfonds).

Regulation of new technologies must become more innovation friendly. The previously risk-averse approach has hampered innovation, particularly in key technologies such as artificial intelligence (AI) and genetic engineering, leading to value creation moving abroad. Startups face particular challenges, especially limited access to capital and relatively small capital markets by international standards. The Federal Government therefore aims to deepen the Capital Markets Union and provide startups with better access to venture capital.

A secure, affordable, and environmentally compatible energy supply remains essential; energy costs in Germany are still high by international standards and require adjustments for greater cost efficiency, digitalization, and more flexible electricity demand. Moreover, the ramp-up of the hydrogen market is being supported through public support for a hydrogen core-network and pragmatic regulation to strengthen investment and supply security.

The availability of qualified workers is also of central importance. A decline in the labor force due to demographic aging is dampening potential growth, while skills shortages and changing qualification requirements due to digitalization and AI pose additional challenges. The Federal Government is focusing on measures to increase employment, particularly among women, older people, and the unemployed, for example through the Aktivrente (active retirement), expanding childcare, and reforming basic income support. In addition, immigration from third countries is being specifically promoted through the establishment of a digital “Work-and-Stay Agency.”

The tax and social contribution burden on labor in Germany is relatively high and, if it increases further, could impair the labor supply from inside and outside the country as well as competitiveness. The Federal Government is therefore focusing on sustainable financing of the social insurance systems and has appointed several expert commissions for this purpose. Measures such as the National Continuing Education Strategy and the Alliance for Initial and Continuing Training are being supported to provide more flexibility and productive adjustment in the labor market.

With regard to international order and security, Germany aims to assume a leading role within the EU, particularly in expanding free trade and trade relations. Agreements already concluded should be ratified promptly, and new partnerships—for example with India and ASEAN states—should be advanced. At the same time, trade barriers in the single market should be dismantled, the integration of the Capital Markets Union deepened, and a harmonized legal framework established to facilitate corporate growth. These measures strengthen resilience and growth by increasing the ability to absorb external and internal shocks.

The structural transformation of German industry is shaped by changing demand patterns and growing risks for economic security and supply chains. In principle, companies and businesses themselves are called upon to factor altered risk situations into their strategic decisions. However, some potential risks, from a macroeconomic perspective, far exceed the direct private costs. In such cases, the state bears responsibility—for example by protecting critical infrastructure, adopting EU preference arrangements for strategic sectors, and forging international raw materials partnerships. Energy cost relief and the national economic security strategy are central measures in this context as well.

For regionally balanced economic development, the Federal Government is relying on the Joint Task “Improvement of Regional Economic Structures” (GRW), whose relaunch from 2026 will create additional investment incentives and simplify access to funding.

The Federal Government is committed to maintaining and strengthening global climate protection ambitions. Germany was among the 197 states at the World Climate Conference in Paris in 2015, which committed to limiting global warming to well below 2°C, preferably to 1.5°C, and to achieving greenhouse gas neutrality worldwide by the second half of the century. At the national level, the Federal Climate Protection Act (Bundes-Klimaschutzgesetz, “KSG”) provides the central legal framework for climate protection policy in Germany. In terms of greenhouse gas reduction targets, the KSG prescribes a reduction target of at least 65% for 2030 compared to 1990 levels, an interim reduction target of at least 88% for 2040 and greenhouse gas neutrality by 2045; after 2050, negative emissions are to be achieved across all sectors. The Federal Government continues to rely on a mix of instruments with carbon pricing, as well as targeted relief for citizens and companies to cushion social hardships and measures to promote investment in climate-friendly alternatives. The focus is, on the one hand, on the targeted expansion of network infrastructure, such as heating and hydrogen network or electric vehicle charging infrastructure. In addition, the federal government is returning the revenue from CO2 pricing to citizens and businesses by, among other things, introducing unbureaucratic and socially tiered relief measures and subsidies for housing and mobility. Competitive disadvantages compared to countries with lower decarbonization efforts are to be limited by the EU carbon border adjustment mechanism, with Germany advocating for a more effective and less bureaucratic design.

Overall, the Federal Government is pursuing a reform agenda that reduces red tape, advances innovation and digitalization, modernizes infrastructure, and makes the energy supply more affordable. Finally, the labor market is being made more flexible and work incentives are being strengthened to offset negative effects from demographic change. The reform agenda aims to increase potential growth and competitiveness while aligning social, economic, and environmental goals.

Sources: Bundesministerium für Wirtschaft und Klimaschutz, Annual Economic Report 2026 (https://www.bundeswirtschaftsministerium.de/mwg-internal/de5fs23hu73ds/progress?id=aHTlDxuZDqkQKZFCgMBpmgtSj8OC3n3khRsjQqCsHiE,&dl)

For further information on the Federal Republic’s fiscal situation and prospects, see “—Public Finance—Germany’s General Government Deficit/Surplus and General Government Gross Debt” and “—Public Finance—Fiscal Outlook.” For information on government measures to stabilize Germany’s financial system, see “—Monetary and Financial System—Financial System—German Financial System.” For information on government budgets, see “—Public Finance.”

Gross Domestic Product

The following tables show the structure of the Federal Republic’s GDP at current prices by use and origin for each of the years indicated along with changes over the respective preceding period.

Structure of GDP — Use