Merz wants to pull Germany out of economic stagnation, but highlights external problems

German Chancellor Friedrich Merz is determined to lift Germany out of its economic stagnation and reignite growth and employment, though he acknowledges significant challenges stemming from external factors. Speaking ahead of the traditional coalition government retreat, Merz defended his administration's reforms in pensions, healthcare, and taxes implemented before the summer break.

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The question now is how to lead our economic model into a new era.

"The question now is how to lead our economic model into a new era," Merz stated, aiming to move beyond the current standstill. Official statistics released on the same day showed the German economy grew by a modest 0.3% in the second quarter, while the unemployment rate edged up to 6.4% in July. Merz asserted Germany's global competitiveness, stating, "Germany can compete globally and even serve as a model. But for that, the state must create the necessary and adequate conditions."

Merz leads a coalition government of conservatives and social democrats, whose popularity, including his own, has reached lows after just 15 months in office. A recent poll indicated that 68% of respondents view the government's performance as poor, and 70% consider Merz's management to be rather bad.

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We want to get out of the stagnation of our economy and we want to generate growth and employment again.

Despite industrial challenges, Merz stressed that Germany retains an "excellent industrial base," a "solid middle class of entrepreneurs," and "world-renowned trades." He also pointed to the country's "top-tier scientific research" as strengths the government intends to leverage for future growth and employment. However, he cautioned that problems "partly come from abroad and cannot be ignored," citing climate change, trade policy conflicts, global imbalances, and security issues like hybrid attacks.

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Germany can compete globally and even serve as a model. But for that, the state must create the necessary and adequate conditions.

Addressing climate change, Merz noted that drought, heat, wildfires, and crop losses clearly demonstrate the urgent need for action. He acknowledged its widespread impact on healthcare, hospitals, nursing homes, and agriculture, reaffirming the government's commitment to curbing climate change.

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There are problems that, in part, come from abroad and cannot be ignored.