Germany news: Economic slowdown expected in 2nd quarter

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AdvertisementSkip next section What you need to know

What you need to know

• Germany's government is predicting a clear economic slowdown in the second quarter
• Rising energy prices have led to lower production and job losses in Germany's energy-intensive industries
• Reports of a dead whale off Denmark have sparked questions about the fate of a humpback that spent weeks stuck off Germany's Baltic Sea coast 

Below is a roundup of news headlines from Germany on Friday, May 15, 2026:  

Skip next section Merz says he wouldn't advise his kids to go to the US05/15/2026May 15, 2026

Merz says he wouldn't advise his kids to go to the US

Christoph Strack

German Chancellor Friedrich Merz says he wouldn't advise his own children or other young Germans to move to the US for study or work.

Speaking at the German Catholic Convention in Würzburg, he referred to "the social climate that has suddenly developed" in the United States and said that "even the best educated in America have great difficulty in finding a job."

"I am a great admirer of America, but right now my admiration is not increasing," he said, to laughter from the 1,600-strong audience — many of them young people. "I wouldn't recommend to my children today that they go to the US, get an education there, and work there."

This was Merz's first appearance at the Catholic Convention since he took office in 2025. Seated alongside the 70-year-old Chancellor were 19-year-old student Amy Kirchhoff from Saxony and 29-year-old Lisa Quarch from the Federation of German Catholic Youth.

For just over an hour, the discussion touched on many domestic German issues: anxieties about the future, educational opportunities, and youth centers that have been hollowed out by budget cuts.

The remark regarding the US is one of those signature personal statements from Merz — the kind that has the potential not only to make the German television news but also to be picked up on the other side of the Atlantic.

The comments come after a public spat between Merz and US President Donald Trump after the chancellor said Iran was "humiliating" Washington.

That prompted an angry response from Trump, who said Merz was doing a "terrible" job as leader and subsequently announced the withdrawal of 5,000 American troops from Germany.

https://p.dw.com/p/5DnsuSkip next section Commerzbank job cuts to be driven by AI05/15/2026May 15, 2026

Commerzbank job cuts to be driven by AI

The head of Commerzbank says artificial intelligence is expected to account for a large share of the roughly 3,000 job cuts planned by the lender.

Germany's second-largest listed bank is seeking to fend off a takeover by Italy's UniCredit and has announced layoffs alongside ambitious profit and return targets through 2030.

"AI is very powerful in various areas," chief executive Bettina Orlopp told German news agency dpa on Friday, adding that the impact of the technology had improved over the past year.

She stressed that Commerzbank aimed to protect its core workforce as much as possible, with cuts focused on external call center capacity and outside IT contractors.

"Given the demographics within our bank, we will make this process as socially responsible as possible," she said.

https://p.dw.com/p/5DnsTSkip next section Merz admits to communication problems, infighting05/15/2026May 15, 2026

Merz admits to communication problems, infighting

German Chancellor Friedrich Merz has acknowledged that his government could do better to communicate with the public and deliver results.

The ruling coalition, made up of Merz's conservative Christian Democratic Union/Christian Social Union and the center-left Social Democrats, has struggled to find common ground on key issues such as pension and labor market reforms, and how to shield consumers from the impact of the Iran war. 

"Dispute is part of democracy," Merz told an audience at the German Catholic Convention in the southern city of Würzburg. "But the dispute needs to lead to results. And maybe we are currently fighting a bit too much and are not delivering enough results. That may be possible." 

Only 13% of Germans are satisfied with the federal government, according to a recent poll, while Merz's approval rating stands at just 16%. At the same time, the far right Alternative for Germany (AfD) is gaining in popularity.

Merz said it was important to find solutions in the political center to the challenges facing Germany and admitted that he needed to work on his communication skills to convince people it was possible.

"I know that I need to improve my communication so that this message is better understood," he said.

https://p.dw.com/p/5DnmPSkip next section Dead whale found off Denmark, minister warns against speculation05/15/2026May 15, 2026

Dead whale found off Denmark, minister warns against speculation

Following reports of a dead whale off the Danish island of Anholt, the environment minister of the German state of Mecklenburg-Western Pomerania says it's unclear if it is the same mammal that spent weeks languishing off Germany's northern coast.

"As soon as we have confirmed information on the matter, we will inform the public immediately," State Environment Minister Till Backhaus said Friday.

Danish media reported late Thursday that a suspected humpback whale carcass had been spotted about 75 meters (245 feet) from Anholt's shore. 

The reports said authorities had no plans to recover the whale.

In late March, a humpback whale — dubbed Timmy by the German press — became stranded off Germany's Baltic Sea coast. The marine mammal spent weeks stuck in Wismar Bay, where its health deteriorated.

A rescue effort led to the animal being moved into the Skagerrak strait in the North Sea and released in early May.

Backhaus cautioned against speculation and said the goal was now "to determine whether the dead whale is the same animal that had previously stranded multiple times in Wismar Bay."

He said he was in close contact with the Federal Environment Ministry and the Danish Environmental Protection Agency.

"However, due to Anholt’s transportation situation, we do not expect quick results," Backhaus added.

https://p.dw.com/p/5DnYjSkip next section German economy to take big hit from Iran war in 2nd quarter05/15/2026May 15, 2026

German economy to take big hit from Iran war in 2nd quarter

The German government says it expects the economy to suffer a significant slowdown in the second quarter as a result of the Iran war. 

The prediction comes less than a month after the government halved its economic growth forecast to 0.5% for the whole year.

"Rising prices, supply ⁠chain ​issues ​and uncertainty are weighing ​on sentiment ‌among businesses and ​households," ⁠the Ministry for Economic Affairs said in its ⁠monthly ​report.

It said further economic development will depend on how long the conflict in the Middle East lasts and how long trade routes and production capacities remain impaired.

"But even after the situation eases, the consequences for energy and raw materials prices and supply chains are likely to remain noticeable for longer," it said.

Europe's largest economy had a stronger-than-expected start to the year, with GDP growing 0.3% in the first quarter compared with the previous quarter.

Rising prices also weigh heavily on industries

High energy costs have also caused Germany's energy-intensive industries to scale back production and cut tens of thousands of jobs, according to the Federal Statistical Office.

Since February 2022, production fell by 15.2% in the chemicals, paper, glass, and metal manufacturing sectors. The number of workers dropped by 53,300, or 6.3%.

The decline in production was most pronounced among manufacturers of concrete, cement, and sand-lime brick products, the statistics office said.

One exception was petroleum processing: it increased its production by 24.6% and created 1,000 new jobs. 

Will the Iran war cause a global recession?

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Sentiment drops in residential construction sector

Meanwhile, sentiment in Germany's housing construction sector dropped in April to its lowest level in four years.

The Munich-based Ifo Institute's business climate index for the sector plummeted from minus 19.3 points in March to minus 28.4 points last month. 

"Geopolitical uncertainty is ‌now also weighing on residential ‌construction ​in Germany," the Ifo's Klaus Wohlrabe said. "With fragile supply chains ​and rising financing costs, several risks are hitting the construction sector ⁠simultaneously."

German economy under pressure

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https://p.dw.com/p/5DnQJSkip next section Welcome to our coverage05/15/2026May 15, 2026

Welcome to our coverage

Dmytro Hubenko Editor

Guten Tag from the DW newsroom in Bonn.

The German government is warning that the impacts of the Iran war will likely cause a significant economic slowdown in the second quarter.

The Ministry for Economic Affairs said the conflict is driving up prices for energy and raw materials, creating uncertainty for businesses and households.

The rising prices are also causing mass layoffs and a decline in production in Germany's energy-intensive industrial sectors, according to new figures from the Federal Statistical Office.

And a survey by the Munich-based Ifo Institute has found that sentiment in German housing construction has plummeted to its lowest level in four years.

Meanwhile, reports of a dead whale off the coast of Denmark have led to questions about the fate of a humpback — dubbed Timmy — that spent weeks languishing off Germany's Baltic coast. 

Stick with us for these and other stories from across Germany.

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