{"id":576763,"date":"2025-11-17T19:25:36","date_gmt":"2025-11-17T19:25:36","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/576763\/"},"modified":"2025-11-17T19:25:36","modified_gmt":"2025-11-17T19:25:36","slug":"the-guardian-view-on-germany-under-merz-europes-powerhouse-is-still-struggling-editorial","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/576763\/","title":{"rendered":"The Guardian view on Germany under Merz: Europe\u2019s powerhouse is still struggling | Editorial"},"content":{"rendered":"

Last March, following angst-ridden months as Europe came to terms with Donald Trump\u2019s return to the White House, financial markets in Paris, Milan and Berlin were gripped by a surge<\/a> of optimism. The cause was a historic deal brokered by Friedrich Merz, then Germany\u2019s chancellor-elect, which loosened constitutional spending constraints in the EU\u2019s powerhouse nation. Here at last, it was hoped, was the fiscal kickstart required to end a prolonged period of economic stagnation, and mitigate geopolitical headwinds blowing from the US and China.<\/p>\n

Six months into Mr Merz\u2019s premiership, the angst is back and there are the first murmurings of rebellion. The\u00a0chancellor\u2019s plan included \u201cwhatever it takes\u201d levels of defence spending, designed to prepare Germany for a changed era in which the US was no longer a dependable ally, and a huge \u20ac500bn investment in infrastructure and the green transition. But last week, the chancellor\u2019s team of economic advisers downgraded<\/a> growth forecasts for 2026 to below 1%. And ahead of what would\u00a0constitute a fourth year of near-flatlining, business\u00a0confidence<\/a>\u00a0has\u00a0slumped.<\/p>\n

Lifting Germany\u2019s \u201cdebt brake\u201d was never going to be an instant panacea for longstanding problems. Patience will be required, for example, before the full impact of spending on the country\u2019s ailing transport systems is felt. But across Europe, patience is a virtue that\u2019s in short supply among voters, who feel<\/a> that their living\u00a0standards have been stagnating \u2013 or worse \u2013 since\u00a0the crash of 2008. According to one recent survey,\u00a0fewer than one in five Germans wish<\/a> to see Mr Merz standing again at the next federal election.<\/p>\n

As the far-right Alternative f\u00fcr Deutschland party tops the polls<\/a>, such disillusionment is a\u00a0problem not just for the chancellor and his centre-right-led coalition government, but for mainstream politics as a whole. Germany has found itself at the sharp end of a wider geopolitical storm<\/a>: Russia\u2019s war in Ukraine, aggressive Chinese competition and Mr\u00a0Trump\u2019s trade wars have all combined to undermine an export-led model that underpinned European prosperity. Mr Merz was right to recognise that the exceptional times required a bold and imaginative fiscal response. But as discontent grows, he is already under pressure from critics to rein in social spending in the hope of increasing the\u00a0country\u2019s competitiveness.<\/p>\n

For a chancellor who once served on the supervisory board of Black Rock and forged a political reputation as a fiscal hawk, that would be a kind of reversion to type. Mr Merz\u2019s Social Democratic coalition partners would attempt to see\u00a0off a threatened revolt<\/a> by Christian Democrat MPs over a proposed pensions package. But the siren calls from familiar quarters on the right should\u00a0be resisted more generally.<\/p>\n

For Germany \u2013 and for Europe as a whole \u2013 the imperatives of the age are to revive a battered and bruised social model, and to turbocharge investment as the global economy is shaped to suit a multipolar world. Falling back on the failed economic orthodoxies of a previous era would only\u00a0be to further empower the far right, which began<\/a> its gradual ascent during the austerity years\u00a0that followed the crash.<\/p>\n

Mr Merz has had a difficult first six months in office. But as the scale of the challenges facing Europe\u2019s most important economy becomes ever clearer, Germany<\/a> cannot afford to go back to the future.<\/p>\n