The European Economic Motor has gripped. The flagship that that model of Germany represented in the years of the 2008 crisis is making waters on almost all sides. The 2024 GDP returned to data from 2016 and the number of unemployed people has grown up to The three million unemployed, numbers that were not achieved since 2015.
A who has seen you and who sees you, manual. The situation of the German economy is in serious problems and this is reflected in the message that its chancellor, Friedrich Merz, moved a few days ago about the welfare state, ensuring that it is “untenable“.
The largest economy in Europe closed 2024 as well as 2023, with a light contraction, a crisis of the industry and a recession and stagnation that has maintained for two consecutive years, something that it had only experienced between 2002 and 2003, although- on that occasion- it did it with a shot unemployment.
But the situation is not positive. Experts talk about a “worrying” situation for the continent and that the economic engine “is now more displaced towards Spain” because it is the country “that is growing the most.”
A stagnant recession
One of the countries most affected by the effects of war in Ukraine was Germany. Overnight, the operation carried out by Vladimir Putin completely disrupted the country’s energy needs.
The German country, wrapped with Brussels in numerous sanctions against the Kremlin, began to limit its dependence on Russian gas. Before 2022, the year in which the Russian offensive began, Germany depended on this energy for 55% of its consumption.
With the aim of diversifying it, he began to buy liquefied natural gas (LNG), but despite having endured that Russian envy, still having an energy dependence that has not yet managed to resolve.
In May 2023, Germany entered into a technical recession -after suffering two consecutive quarterly falls from GDP-. The strong inflation finished off some increasingly complicated plans for the European engine. In the first quarter of 2023, he repeated the same scenario as in the last quarter of 2022 and suffered a contraction again, in that case of 0.3%.
But that situation has not changed the stage in recent months. Despite not registering falls, the main economy of the European Union has gone to stagnation. There are the GDP data of 2024, which have registered a 0.2%drop, with a contraction that remains for the second consecutive year. And it is not something that is improving. The last data, of the second quarter of 2025, is another jug of cold water for the German chancellor, with a contraction of 0.3%.
The highest unemployment since 2015
Another front is being the unemployment. It is true that the figures have grown by the end of the contracts signed to reinforce the summer, but the trend is clear and has not stopped growing. From the 5% unemployment rate of March 2022, it has been growing, with some ups and downs along the way, until reaching 6.4% of 2025, its highest figure since the same month of 2015.
Compared to the July data, unemployment grew by 46,000 people and in 153,000, in the comparison with August 2024. In unstacted terms, The unemployment fell into 9,000 peopleaccording to the data published on August 29 by the Federal Employment Agency (BA).
But the position adopted by the German government to try to stop this situation does not seem quite the appropriate. Chancellor Friedrich Merz pointed out a few days ago that the current welfare state in Germany “It can no longer be financed with what we produce in the economy“A few words he mentioned, after having committed to considerably increasing military spending in the next four years.
“Germany is in crisis”
The atypical situation that Germany is living- together with political instability in France- has lit some alarms. Experts suggest that it is worrying for the German country, but it is also being for the European Union itself.
José Manuel Corrales, professor of economics and business at the European University of Madrid, explains that “Germany has ceased to be the locomotive of Europe” and is now more focused on Spain. Something that is “positive for our country, but negative for the EU because this is being given in a global crisis situation“.
“There are two great models that are being confronted: the Chinese, who has had several shocking photos with India, North Korea and Russia, and the American model. The EU is in crisis and Germany’s data are worrisome data,”
In the case of the German country, José Manuel Corrales emphasizes that the “recession” and “prolonged stagnation in 2023 and 2024” is the evidence that “Germany is in crisis and can infect all of Europe“.
Germany is in crisis and can infect all of Europe
José Manuel Corrales, Professor of Economics and Business at the European University of Madrid
Christophe Canler, professor at Carlemany University, agrees that the evolution of the German economy He has been “quite negative” and acknowledges that before “it was the locomotive and now it is the ugly duckling of Europe”.
The expert emphasizes that its growth was based on three competitive advantages, the low investment in defense, Russian cheap energy and its commercial and exploitation relations with China. Now everything has changed and, precisely, has given more strength in the production of the Asian country. “What has happened is that the Chinese know how to copy very well and once they do, they improve the product. Right now German cars, especially electric, have an important disadvantage against the Chinese, “he says.
Christophe Canler says that while Germany has risen its GDP only 0.1% accumulated in the last six years, the EU has done 4% and the United States by 12%. “What is very worrying at European level is that a few years ago the GDP of Europe and that of the United States were going and now is 30% higher than that of Europe. He has gone to less and Germany has a very large weight. 60% of that fall comes from there, “he adds.
A few years ago the GDP of Europe and that of the United States went along and now that of the United States is 30% higher than that of Europe
Christophe Canler
“France has opted for nuclear energy and French electricity is very cheap. Germany has not invested in infrastructure. It has been investing very little in it and in digitalization,” he explains, before remembering the problem that exists with a more aging population and less and less young people: “Start to be lacking qualified labor“.
Without a doubt, the situation in Germany is complicated. The poor evolution from the pandemic continues to make a dent in the growth of the country and the fear that the recession in which it is spread in an increasingly touched Europe- to which you have to join the donald tariffs Trump All eyes point to a European locomotive that has been completely gripped.
