The term recession refers to an economy that is shrinking. This has been happening in Germany for two years now, the only country in the European Union experiencing such a decline.

In 2024, more companies closed than in the previous major financial and economic crisis in 2011. High electricity prices have meant that energy-intensive industries have been hit especially hard. In addition, companies are having to close due to a shortage of workers and specialists as society is ageing. Germany's burgeoning bureaucracy is another major factor hampering business.

The new government has set out to improve the situation quickly and sustainably. But this will not come about overnight. This is the finding of the Federal Government's economic advisory body. In its spring report, the German Council of Economic Experts spoke of a "period of considerable sluggishness" and practically ruled out a rapid recovery.

For 2025, the five economics professors project stagnation, meaning zero growth. In 2026, they see the economy possibly recovering somewhat with one percent growth. However, the experts are far from certain that Germany will be able to get back on track for economic success in the medium and long term.

The German economy has become less and less competitive. A decisive factor was Russia's invasion of Ukraine in 2022 and the halt to Russian gas supplies. The successful German business model of using cheap energy and high engineering skills to manufacture products that are in demand worldwide has been history ever since.

On top of this, there are also domestic problems. "Bureaucratic regulations and........

© Deutsche Welle