- See more This is Money on Google - save us as a Preferred Source
The bruising defeat of Chancellor Friedrich Merz reflects the stalling of what once was Germany’s mighty economic engine.
His centre-Right Christian Democratic Union party was crushed in two regional elections over the weekend.
Left-wing anti-capitalists triumphed in Berlin.
asserted
capitalists → see → Berlin
In Mecklenburg-Western Pomerania the far-Right Alternative fur Deutschland (AfD) took more than 38 per cent of the vote, just ahead of the centre-Left Social Democratic Party.
asserted
Deutschland → take → Party
Merz’s Christian Democratic Union limped in with less than 5 per cent of the vote.
asserted
Union → limp → vote
The AfD won 44 per cent of the vote earlier this month in Saxony-Anhalt – a relatively small and not particularly prosperous state – but it was a victory that nonetheless attracted worldwide notice.
asserted
that → win → notice
The Wirtschaftswunder (the economic miracle of West Germany’s rapid reconstruction following the Second World War) was based on industrial prowess.
asserted
Wirtschaftswunder → follow → prowess
The manufacturing boom was enabled by cheap energy, much of it from Russia, open markets and high demand from China for German imports.
asserted
boom → enable → imports
Chancellor Friedrich Merz's centre right Christian Democratic Union party was quashed in two regional elections over the weekend
Even the high costs of reunification after the fall of the Berlin Wall seemed to have been taken in Germany’s stride, though it has since become clear that stark divisions remain.
asserted
divisions → quash → stride
Now the country is struggling with rising energy prices after the war in Ukraine and conflict in the Middle East.
asserted
country → struggle → East
Former chancellor Angela Merkel’s decision to shun nuclear energy after the Fukushima catastrophe has not helped.
asserted
decision → shun → catastrophe
China, once an avid customer, has become a competitor.
asserted
China → become → ?
Volkswagen cut its profit forecast a few days ago and tens of thousands of workers were protesting yesterday over proposed job losses and changes to working conditions.
asserted
thousands → cut → conditions
German manufacturers were late to invest in electric vehicles, leaving themselves open to rivalry from Chinese EV producers.
Donald Trump’s tariffs are costing the German economy billions.
asserted
tariffs → invest → billions
Germany’s population is ageing.
asserted
population → age → ?
Welfare and pension spending is at a record high, as a shrinking working-age population has to support more of its elders.
asserted
population → shrink → elders
Merz was bringing in incentives to invest along with moves to cut taxes and energy costs, but not quickly enough to satisfy business leaders or voters.
asserted
Merz → bring → leaders
The Bundesbank has been making emollient suggestions over the summer that the economy is on the mend.
asserted
economy → make → mend
However, Joachim Nagel, its president, expressed fears after Saxony-Anhalt that political developments will scare off investors and nip any nascent recovery in the bud.
asserted
developments → express → bud
In France, concerns are mounting over its public finances ahead of next year’s presidential election.
asserted
concerns → mount → election
Marine Le Pen’s National Rally has had chequered fortunes recently, but she is doing well in opinion polls.
asserted
she → have → polls
Here, Prime Minister Andy Burnham is heading for a difficult Budget and a well-funded Reform party is proving resilient in the face of scandal.
asserted
party → head → scandal
Disaffected voters are attracted to politicians who seem to have straightforward answers.
asserted
who → attract → answers
In a world of complex, entrenched and long-denied problems, that is rarely the case.
asserted
that → deny → problems
Unlike the Norwegians, who have, by and large, been wise stewards of their North Sea wealth, politicians here have made a poor fist with ours.
asserted
politicians → make → ours
Chancellor John Healey should heed calls from industry leaders calling for the windfall tax, introduced by the Tories and hiked by Labour, to be phased out more quickly than the current timetable.
asserted
tax → heed → timetable
Some 25,000 jobs in the sector have been lost since Labour came to power and if the tax remains in place, more will go, leaving the country without the skills needed to move to green energy.
asserted
more → lose → energy
It is not possible to wave a wand and simply magic up skilled workers when new green energy projects require them.
asserted
projects → wave → them
We could have set up a sovereign wealth fund as was the case in Oslo.
uncertain
case → set → Oslo
It could now be cushioning our economic woes and funding growth.
uncertain
It → cushion → growth
Instead, Labour seems intent on blowing what remains of the North Sea bounty.
asserted
what → seem → bounty
Who says the UK can’t produce AI companies?
asserted
UK → say → companies
British-based data centre business Nscale, which is backed by Nvidia, has just filed for an IPO.
asserted
which → base → IPO
The HQ is in London and former deputy prime minister Nick Clegg, who went on to make his fortune at Meta, graces the board.
asserted
who → go → board
Its youthful founder, Josh Payne, an Aussie, stands to make millions if things go well, according to reports.
uncertain
things → stand → reports
If you take out a product This is Money may earn a commission.
uncertain
This → take → commission
These deals are chosen by our editorial team, as we think they are worth highlighting.
asserted
they → choose → team
This does not affect our editorial independence.
asserted
This → affect → independence
The Aporia
