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German Chancellor Friedrich Merz faces his first electoral challenge since taking office as voters head to the polls in the state of Baden-Württemberg on Sunday. The election is seen as an early test of support for Merz’s conservative Christian Democratic Union (CDU), which hopes to regain dominance in a region long tied to Germany’s car industry.

Opinion polls show a tight race between the CDU candidate Manuel Hagel and the Greens’ Cem Özdemir, both polling around 28%. The winner will succeed outgoing Green premier Winfried Kretschmann, with the outcome likely shaping the balance of power in the state government coalition.

Meanwhile, the far-right Alternative for Germany (AfD) continues to poll strongly at about 20%, reflecting growing political shifts across Germany. The Baden-Württemberg vote is the first of several regional elections this year and comes amid economic concerns linked to rising fuel prices and global tensions.

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Germany’s armed forces face a critical recruitment shortfall that could force Berlin to reinstate compulsory military service if voluntary efforts fail, the country’s Parliamentary Commissioner for the Armed Forces has warned. In his annual report, Commissioner Henning Otte said personnel shortages remain the Bundeswehr’s most pressing bottleneck as Germany seeks to strengthen its military capabilities amid heightened security concerns over Russia and pressure from the United States.

Chancellor Friedrich Merz’s government has pledged to rebuild the Bundeswehr into Europe’s strongest conventional army after years of underinvestment. Berlin aims to expand active troop numbers to 260,000 from nearly 185,000 and double reservist strength to 200,000 by the mid-2030s. As part of this effort, authorities have introduced a voluntary model requiring all 18-year-olds to complete a questionnaire indicating their interest in military service.

However, the report cautions that modest gains in troop numbers — about 3,000 additional active soldiers by the end of 2025 — may not be enough to meet ambitious targets. Demographic decline, competition for skilled workers and high dropout rates are limiting growth. The commissioner warned that political goals risk outpacing military realities, adding that a return to compulsory service may become necessary if voluntary recruitment does not deliver sufficient personnel.

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The European Union’s 27 member states have called for “maximum restraint” and full adherence to international law amid escalating hostilities involving Iran. In a statement issued after an emergency meeting of foreign ministers, EU foreign policy chief Kaja Kallas stressed the need to protect civilians and uphold the principles of the UN Charter and international humanitarian law. The appeal followed U.S. and Israeli strikes on Iran and Tehran’s retaliatory attacks on Israel, U.S. forces and Gulf countries, which the EU described as inexcusable violations of sovereignty.

The bloc also voiced concern about the broader regional and economic fallout of the conflict, warning against escalation that could destabilize the Middle East and beyond. It highlighted the importance of keeping critical waterways such as the Strait of Hormuz open, citing risks to global energy supplies and supply chains. Disruptions to oil flows could have significant economic consequences for Europe, which is already grappling with geopolitical uncertainty.

The joint statement reflected differing views within the EU over the U.S.-Israeli military action. While German Chancellor Friedrich Merz signaled caution against criticizing allies, Spanish Prime Minister Pedro Sánchez rejected the strikes as contributing to global instability. Diplomats acknowledged that Europe has limited leverage over the unfolding crisis, despite the potential for serious regional and economic repercussions.

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Germany’s unemployment total remained above three million in February, underscoring persistent strain in Europe’s largest economy after two consecutive years of contraction. Labour office data showed 3.07 million people out of work, slightly down from the previous month but 81,000 higher than a year earlier. On a seasonally adjusted basis, unemployment rose by 1,000 to 2.977 million, while the jobless rate held steady at 6.3%, matching forecasts.

Labour office head Andrea Nahles said the market was still struggling to regain momentum following the winter period. The figures pose a challenge for Chancellor Friedrich Merz, who has pledged to revive growth through increased infrastructure and defence spending. Analysts said that with the economy stagnating for years and industry facing structural pressures, a gradual weakening in the labour market was largely unavoidable, with no clear turning point yet in sight.

Other data offered mixed signals. Inflation dipped below 2% in several German states in February, pointing to easing price pressures nationally, in line with a broader slowdown across the euro zone. Real wages continued to recover, rising 1.9% in 2025 and 2.9% in 2024, though they remain below pre-2019 levels after inflation shocks linked to the pandemic and Russia’s 2022 invasion of Ukraine eroded purchasing power.

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German Chancellor Friedrich Merz has embarked on his first official visit to China, leading a delegation of senior German business leaders, including heads of Volkswagen, BMW, and Mercedes-Benz. The trip aims to strengthen economic ties as Germany faces growing trade deficits and competitive pressures from China’s booming electric vehicle industry. Merz’s visit comes amid concerns over supply chain vulnerabilities and global economic rivalry.

China, Germany’s largest trading partner in 2025, has reversed years of trade surpluses, leaving Germany with a deficit of nearly €90 billion. German officials warn that export controls, overcapacity, and rising competition from Chinese firms have created a challenging environment for German manufacturers, prompting calls for Merz to negotiate better terms for industry.

During his visit, Merz is scheduled to meet President Xi Jinping and Prime Minister Li Qiang, signing economic agreements and visiting major facilities, including a Mercedes-Benz EV plant and Siemens Energy site. The trip reflects Germany’s strategic effort to balance trade relations with China while addressing EU measures protecting local industries from underpriced imports.

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Germany’s Social Democratic Party (SPD) has proposed sweeping changes to inheritance tax rules, setting up a fresh dispute with its conservative coalition partner. The reforms aim to make the system fairer by increasing taxes on large estates while easing the burden on smaller inheritances, just as the government faces several important regional elections this year.

While both the SPD and Chancellor Friedrich Merz’s conservative bloc agree on the need for tax relief to revive the weak economy, they strongly disagree on how to achieve it. The disagreement adds to growing tensions within the coalition, reinforcing public perceptions of a divided and slow-moving government at a time when voters are demanding clear economic direction.

Under the SPD plan, heirs would be able to inherit up to around one million euros tax-free, and family homes would remain exempt if the heir continues to live there. Family businesses would receive allowances of about five million euros, but larger firms would face higher taxes — a move strongly opposed by conservatives, who warn it could hurt Germany’s small and medium-sized companies.

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German Chancellor Friedrich Merz has called on Europe to assert its interests more forcefully to safeguard peace and prosperity in 2026, warning of mounting threats from Russian aggression, global protectionism and shifting relations with the United States. Speaking in his New Year’s address, Merz said the war in Ukraine posed a direct threat to Europe’s freedom and security, adding that Russia’s actions were part of a broader strategy targeting the entire continent.

Since taking office in May, Merz has played a key role in pushing European support for Ukraine and strengthening Germany’s defence posture. He said Germany now faces daily challenges including sabotage, espionage and cyberattacks, underscoring the need for greater resilience. Merz also highlighted economic risks from rising protectionism and Europe’s dependence on imported raw materials, which he said were increasingly being used as tools of political pressure.

Merz pointed to Germany’s struggle to revive its export-driven economy after two years of contraction, as Berlin seeks to reduce reliance on China while navigating global trade tensions and the impact of U.S. President Donald Trump’s tariff policies. Acknowledging a more difficult partnership with Washington since Trump’s return to office in 2025, Merz said Europe must rely more on itself, stressing that confidence, not fear, should guide the continent’s response as it works to renew long-standing peace, freedom and prosperity.

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The Kremlin has dismissed European accusations that Russian President Vladimir Putin aims to restore the Soviet Union or launch an attack on NATO. Spokesman Dmitry Peskov said on Tuesday that such claims were false and disrespectful, insisting that Putin has repeatedly stated it is impossible to recreate the U.S.S.R. Putin, who once described the Soviet collapse as a major geopolitical catastrophe, has long argued this view relates to the hardship faced by Russians at the time, not a desire to rebuild the former bloc.

The remarks came after German Chancellor Friedrich Merz claimed Putin seeks to revive the “old Soviet Union” and posed a threat to NATO. Western leaders have frequently warned that a successful Russian campaign in Ukraine could embolden Moscow to target NATO member states. Putin, however, has repeatedly called the idea irrational, pointing to NATO’s military superiority.

Peskov rejected Merz’s statements as misguided and offensive, saying the allegations misrepresent Russia’s intentions. He reiterated that suggestions of Moscow preparing to attack NATO are “complete stupidity,” accusing critics of misunderstanding or deliberately twisting Russia’s official positions.

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German Chancellor Friedrich Merz narrowly secured parliamentary approval for a contentious pensions bill, passing it with 318 votes in the 630-seat Bundestag, despite internal rebellion from members of his own conservative bloc. The bill, which adds €185 billion to pension spending over 15 years and maintains pension levels at 48% of average wages until 2031, was a key coalition agreement with the centre-left SPD.

However, the tense vote exposed Merz’s shaky control over his ruling coalition, just seven months into his term. Several conservative lawmakers opposed the plan, calling it financially irresponsible and unfair to younger generations. Analysts warn that internal conflicts and governance challenges are damaging Merz’s authority and could hinder future economic and defence reforms, while fuelling a surge in support for the far-right AfD.

Merz has pledged broader pension reforms next year, including possible longer working years and delayed pension eligibility. Despite winning international praise for his stance on Ukraine, his domestic approval has fallen sharply to about 25%. Polls show declining support for both governing parties, reinforcing concerns that the coalition appears divided, ineffective, and increasingly unstable.

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Germany’s parliament has approved a voluntary military service program for 18-year-olds, marking a major shift in the country’s defense policy. From January 2026, all 18-year-olds will receive a questionnaire asking if they are interested in joining the armed forces. While participation will initially be voluntary for men and women, mandatory medical exams for men will start in July 2027 to assess fitness for potential service. The move aims to strengthen Germany’s military after Russia’s invasion of Ukraine and to meet NATO force targets.

The decision has sparked protests across the country, with students in as many as 90 cities planning strikes. Critics argue that military service disrupts lives, encourages obedience training, and exposes young people to the realities of war. In Hamburg alone, about 1,500 people were expected to protest, highlighting widespread skepticism among German youth about the new law.

Germany’s armed forces currently number around 182,000, and officials plan to increase this to 260,000 by the early 2030s, supplemented by 200,000 reservists. Incentives for voluntary service include a monthly salary of €2,600, making it more attractive than similar programs in France. The legislation reflects Chancellor Friedrich Merz’s push to rebuild the Bundeswehr into Europe’s strongest conventional army amid growing security concerns.

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