In an increasingly volatile global economy, Germany finds itself under mounting pressure to protect its industrial backbone and restore financial stability.
With international markets tumbling and fears of recession deepening, Berlin’s next leader is signaling urgent corrective action.
Merz Sounds the Alarm
Friedrich Merz, the incoming German chancellor, described the current turmoil on global equity and bond markets as “dramatic” and warned that the situation could deteriorate further.
In an email statement to Reuters, Merz emphasized that Germany must urgently restore its competitiveness, calling for the issue to be central in ongoing coalition negotiations between his CDU/CSU bloc and the Social Democrats.
Merz doubled down on long-held conservative priorities, reiterating demands for tax cuts, slashing bureaucracy, and reducing energy prices to support German businesses.
His remarks follow a sharp downturn in European markets, with major indices falling to six-month lows on Monday. Investors are rattled by Washington’s new tariff regime and the growing likelihood of a global recession.
Pressure from U.S. Tariffs
The latest economic strain stems in part from sweeping new import tariffs announced by U.S. President Donald Trump.
Starting Wednesday, Germany—along with other EU nations—faces 25% tariffs on steel, aluminum, and automobiles, and a 20% levy on nearly all other goods in what the White House has branded a “reciprocal trade adjustment.”
As reported by Digi24, these new measures add pressure to an already ailing German economy, which has been stuck in recession for two years.
With coalition talks still underway, Merz’s strong economic message may shape the incoming government's agenda.
Whether the proposed reforms can be enacted quickly enough to stabilize investor confidence and jumpstart growth, however, remains to be seen.
