Here’s the big picture.

German companies are losing market share across the world as importers turn to cheaper Chinese products that appear to meet the same standards. After peaking in 2018, the value of German exports has been declining ever since. As profits fall, so too does the tax revenue the state can extract from them. At the same time, these same companies are pressing the federal government to reduce their tax burden so they can compete on price again.

That would be easier to grant if the state did not need the money so badly.

On one side, there is the return of great-power conflict. A revanchist Russia has forced Germany to dramatically increase defence spending in an effort to prevent the war in eastern Europe from spreading beyond Ukraine. On the other, an ageing population is driving up the cost of pensions and healthcare, placing ever greater demands on the public purse.

This leaves the government with an unenviable set of options. Raise the burden on the private sector and risk accelerating the decline of German industry? Take on more debt and push the problem into the future, at potentially higher cost? Or cut welfare spending and risk alienating the elderly voters who form the last reliable base of Friedrich Merz’s CDU and his junior coalition partner, the Social Democrats?

This conundrum broke the last government — and it seems to be straining the current one to breaking point, too.

Earlier this month, when Merz convened his cabinet at a villa on the outskirts of Berlin to agree on measures to revive the economy, the talks reportedly ended in a shouting match. After hours of discussion failed to produce a breakthrough, Merz is said to have lashed out at his finance minister, Lars Klingbeil of the SPD.

The underlying conflict is familiar. The CDU wants to reduce costs for companies — including by loosening labour protections and cutting taxes — in the hope of restoring competitiveness. The SPD, meanwhile, is focused on preserving workers’ rights and the welfare state, and is more willing to countenance higher borrowing.

Merz had hoped to present the outlines of a major reform package this month — having already promised an “autumn of reforms” last year that never materialised. Instead, the failure to reach agreement has left him with far more limited measures, such as a temporary cut to fuel taxes to offset the impact of the blockade of the Strait of Hormuz.

The first obituaries for his government are already being written. Barely a year after taking office, lawmakers within the coalition are openly questioning whether it will last.

And yet, for all the political paralysis, the first signs of a reform agenda are beginning to appear. Under pressure, the government is starting — slowly — to shift costs.

First up is healthcare.

The cabinet agreed this morning to changes in how the system is financed that are expected to save €17 billion a year. Germany has the most expensive healthcare system in Europe, but far from the best, and reform has long been overdue. For now, however, the government is not attempting a full overhaul. Its more immediate goal is to stop costs from spiralling.

Without intervention, the gap between contributions and spending — driven by an ageing population and a shrinking base of contributors — was projected to reach €40 billion by the end of the decade.

Those costs would ultimately have fallen not only on workers, but also on employers, who cover half of their employees’ health insurance contributions — further eroding the competitiveness of German industry.

The reforms now on the table reflect the limits of what is politically feasible. Some services will be cut. More importantly, the burden will shift — away from employers and onto the individual.

Under the draft bill, statutory insurers will no longer be required to cover certain preventative screenings, such as those for skin cancer, nor will they reimburse homeopathic treatments. Both, health minister Nina Warken has argued, lack evidence of improving outcomes.

The more consequential changes, however, lie elsewhere: higher out-of-pocket payments for prescribed medicines; lower sick pay; restrictions on free co-insurance of non-working spouses; and increased contributions from higher earners. Warken has been careful to stress that the people who will bear the largest costs are those who either earn more or who choose not to participate in the job market.

At the same time, parts of the system that drive costs will be restrained. Payments to doctors and hospitals — long shaped by a byzantine, service-based compensation model — are to be capped. Physicians, who are largely self-employed, bill insurers for each treatment they provide, a system critics say incentivises volume over necessity. Medical associations have warned that cutting these payments will lead to worse service for patients.

Critics argue that the reforms place a disproportionate burden on those in the statutory system, while leaving private insurance — accessible mainly to higher earners, the self-employed, and the cloistered Beamtenschicht (teachers and state administrators) — comparatively untouched. Doctors treat privately insured patients preferentially, as they receive higher compensation for doing so.

The legislation, which still has to pass through the Bundestag, is based largely on recommendations from a commission that delivered its proposals only a month ago. Warken has pointed to the speed of implementation as proof that the current government is capable of delivering on its promise of reform.

This is also the first reform the broader public will notice, either in its pocket or in overcrowded waiting rooms. It will be the first test of whether the coalition can get the balance right in spreading the costs while minimising the damage to services. So far, the anger appears to have been confined mainly to doctors’ associations. The public might not be delighted to be paying more for healthcare, but there is little evidence yet that this has the potential to be Merz’s Heizungsgesetz.

Not so long ago, Germany also marked a major anniversary — although “marked” would be something of an exaggeration. When the country turned 150 five years ago, no one noticed. There were no street parties, no celebrations of the moment when the German nation state was born. Admittedly, the anniversary fell during the pandemic. But even without it, the occasion would have passed largely unnoticed. The only significant commemoration was a speech by President Frank-Walter Steinmeier — and it captured the national mood su…

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It is well known that Germany only criminalised rape within marriage in the late 1990s. Until then, the Bundestag was of the opinion that a husband could not force his wife to have sex — that consent, once given at the altar, extended indefinitely.

Less well known is that until 1995, German courts did not classify so-called “honour killings” as murder. Men, mainly Anatolian migrants, who killed female relatives for transgressing against Muslim values were routinely convicted of manslaughter and received comparatively lenient sentences. The courts showed explicit understanding for the cultural motives behind the crimes.

On paper, Germany has come a long way since then. Whether it has done so in practice is another question. What has changed is not necessarily the instinct to excuse — but who is doing the excusing.

Chancellor Friedrich Merz…

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Germany is often described as a country that reinvented itself three times in the first half of the 20th century.

First there was the strictly hierarchical Prussian monarchy, which was swept away by the chaotic Weimar Republic. That in turn was overthrown by a fascist dictatorship. And from its ruins emerged the liberal democracy that governs Germany today. Each step is typically framed as a clean rupture with what came before.

That is not quite true. Despite the upheaval of that period, fundamental aspects of modern German democracy are better understood as a democratic refashioning of the Prussian state than as an import of Anglo liberalism. Laws that police speech, for instance, have their origins in the Prussian state. However, the clearest expression of that continuity is the survival of the Beamtentum — a class of public officials whose lineage stretches back well before 1918.

The modern German state still rests on the figure of the Beamter: a public official who swears…

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Friedrich Merz, when still leader of the opposition, once coined a stinging epithet for the then chancellor Olaf Scholz. Scholz, he said, was a Klempner der Macht — a plumber of power: a man adept at fixing leaks, but incapable of designing a better system.

The label stuck. But if Scholz was the diminutive Mario, Merz is proving to be his lanky brother Luigi — still patching pipes rather than confronting the fact that the system itself needs replacing.

Like his predecessor, Merz has shown himself incapable of shaping events abroad to secure Germany’s interests at home. Instead, he is bogged down in cosmetic domestic fixes to problems whose causes lie far beyond Germany’s borders.

This became clear within weeks of his taking office. As opposition leader, Merz spoke confidently about the fact that he would supply Ukraine with Taurus cruise missiles — something Scholz had refused to do. In power, he has gone silent. At the same …

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When German environmental activist Luisa Neubauer first stepped onto the stage of “Fridays for Future,” she expected to battle disinformation about climate science — not about her own body.

“For the past seven years, I’ve been wondering what to wear to climate strikes so that my body draws as little attention as possible,” she said in a recent interview with Spiegel Online. “And while I stand in front of my closet trying to figure out how to dress inconspicuously, some men are developing AI programs online that allow them to undress me.”

Neubauer is one of several high-profile women in Germany who have recently stepped forward after discovering -- or being informed of -- AI-generated pornographic deepfakes of themselves circulating online.

What’s now coming to the forefront of the mainstream is something victims and their advocates say they’ve already been fighting for years: a problem that affects ordinary women and girls just as much as (if not mor…

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Dear Reader,

One of the delights of raising children in Germany is reading the Grimm fairy tales in the original. We own an unabridged collection which, amid the barrage of modern books seemingly designed to give children epilepsy, remains their favourite.

What becomes clear from reading them is that medieval Germans had a troubled relationship with the creatures lurking in the forests beyond their villages. Wolves recur throughout the tales — always sly, deceptive, and on the lookout for a child to devour. Stray from the path, as Rotkäppchen did, and trouble quickly follows. The children, fortunately, tend to survive their journey into the animal’s belly. The wolf, by contrast, gets his due: stones are placed inside him as he sleeps off his meal, and when he wakes, he collapses and dies a miserable — if well-deserved — death.

It is little wonder that Germans from the 16th to 19th centuries made such determined efforts to eradicate these animals. After the…

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Only five years ago, Germany became one of the few countries in the world to elevate climate protection to a constitutional right.

A group of youth activists had argued that the government’s goal of becoming “carbon-neutral by 2050” was little more than a slogan—one that offloaded the burden onto younger generations while politicians stalled.

In part to the activists’ own surprise, the Constitutional Court pounded down its gavel in their favour. In 2021, it ruled that young people have a “fundamental right” to a healthy climate, and that the government needed to set out credible, legally binding pathways to cut CO2 emissions now.

If it failed to do so, the judges warned, the courts could intervene when policies were too weak, too murky, or too slow (in other words: typically German). The then–traffic-light coalition scrambled to respond, committing to a 65 percent reduction in greenhouse ga…

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An everyday occurrence on the autobahn.

It’s nighttime on a two-lane highway just north of Frankfurt. An SUV driver pulls out to overtake a slower vehicle. Far behind, a car starts to flash its headlights, signalling that she should move back over. The vehicle zooms up behind her, still flashing furiously. She switches back into the right lane. He overtakes, then slows right down, forcing her to put her foot on the brake. After half a minute of this strange act of posturing, he accelerates off into the distance.

There is a whole German vocabulary for awful drivers. This person was a Drängler – a tailgater – someone who thinks that the lack of a speed limit means that everyone else has to get out of their way.

It is not uncommon for these people to kill other road users through their egotistical behaviour. A few months ago, an impatient Drängler tried to overtake a slower vehicle by using the right lane, but crashed on his way around, causing a pile-up that killed three people…

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A few years ago, I spent a day in the life of a Syrian man working as a parcel delivery driver in Berlin. He was posting packages for a very wealthy online shopping company that would send me threatening legal letters if I were to mention its name here.

In practice, though, he wasn’t employed by them. Instead, he was working for a company at least two steps removed. His boss was a Syrian man who had worked his way up from the bottom and was running a fleet of half a dozen hired vans. He, in turn, was delivering for a larger Subunternehmen. That company may have worked directly for the trillion-dollar-company-that-must-not-be-named — or it may itself have been buffered by yet another layer of unaccountability.

At the bottom of the chain were drivers who spoke no German, signed ‘mini-job’ contracts, and were paid cash in hand to work hours well beyond legal limits. Higher up were people with enough German to set up small companies. They, in turn, worked for larger subcontracto…

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I don’t remember much about being 10 years old in California. But three things stand out: drawing a giant hopscotch court in chalk at school recess, building a wobbly cardboard replica of Mission San Francisco, and bringing home report cards full of mediocre marks.

My parents shrugged off the latter. It didn’t matter yet, they said — there would be plenty of chances to get good grades later.

Thirty years on, I’m sometimes grateful I didn’t grow up in Germany, where children were — and still are — sorted into different school tracks when their age is barely a double digit. The decision largely hinges on one teacher’s recommendation, based on grades and classroom performance in subjects like maths and German.

That one teacher decides whether a child is suited for the more academic Gymnasium, which ultimately prepares them for the Abitur, Germany’s university entrance exam. Or they can decide that a 10- or 11-year-old pupil would be a better fit for a vocational Realschule or Ha…

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There is a simple and unavoidable truth about modern life in Germany: working lives are too short, and retirements are too long — far too long. The imbalance between the two is structural — and it is widening.

As life expectancy rises, the gap between what is paid into the pension system and what is taken out inevitably widens. That is not ideology; it is arithmetic. Governments have two ways of closing that gap. They can raise contribution rates, reducing disposable income and increasing labour costs. Or they can hold contributions steady and quietly transfer ever larger sums from the federal budget to prop up the system.

In times of surplus, the second option is politically irresistible. And so that is the path Germany chose.

During the 2010s, the demographic time bomb had not yet detonated. The baby boomers were still in work, and the high tide of globalisation was delivering large gain…

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A few months before Russia invaded Ukraine, a barbecue was taking place on the grounds of a local football club in the small Bavarian town of Weilheim.

Among the guests was Carsten L., a man in his fifties who coached one of the club’s youth teams. To the other coaches he was simply a soldier whose regular absences from the quiet commuter town were due to deployments in Afghanistan and elsewhere.

But there was one man at the barbecue who knew better.

Arthur E., a charismatic Munich businessman with Russian roots, knew that Carsten was not merely a soldier. He was one of the senior officials at the Bundesnachrichtendienst (BND), Germany’s foreign intelligence service.

Arthur struck up a conversation, news reports at the time stated. A friendship followed.

But it was a friendship with a purpose.

Arthur was working on behalf of the Russian state. His task was to persuade Carsten to pass him classified information in exchange for money.

Early the following year, after Russian troops …

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Superwahljahr 2026 — super election year 2026 — has begun, and things have not started well for the Social Democrats, Germany’s oldest party and the political home of chancellors such as Willy Brandt, Helmut Schmidt and (ahem) Gerhard Schröder.

In Baden-Württemberg on Sunday, the Social Democrats won just 5.5 percent of the vote, putting them perilously close to dropping out of parliament altogether by missing the 5 percent threshold required to gain seats in the state legislature.

With four more state elections to go this year (out of a total of 16), the result has led to chatter about the SPD entering a death spiral into political obscurity.

Comparisons have been made with the Free Democrats, Germany’s traditional liberal party, which — also a junior partner in a quarrelling centrist coalition — suffered a series of disastrous results in state elections that ultimately sca…

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Baden-Württemberg holds state elections on Sunday. These are the first major elections since Friedrich Merz took office last year.

Das Ländle, as Baden-Württemberg is colloquially known, is the third-largest state in the country by population — and the second richest. It is home to the stunning scenery of the Black Forest and the great research institutions of Freiburg, Heidelberg and Tübingen. The narrow valleys of the Swabian Alb, stuffed with factories, form the beating heart of Germany’s Mittelstand. State capital Stuttgart is home to Daimler, Porsche and Bosch.

The state’s majority population — the Swabians — have a reputation for industriousness and thrift. Those traits raised the region from widespread poverty in the 19th century to prosperity today. “Schaffe, schaffe, Häusle baue” — work hard and build a house — is an idiom that is said to sum up the Swabian mindset. For locals, it expresses a mentality that emphasises hard work and long-term planning. For those who …

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In the hours before the joint American-Israeli strikes on Iran early Saturday morning, only one European country was informed in advance: Germany.

Notably, Chancellor Friedrich Merz (CDU) has also been the only European leader to meet Donald Trump since the targeted blows on Tehran — attacks that have since escalated into a broader Middle Eastern conflict.

One might think this access gave Merz a golden opportunity to pursue the trajectory he outlined at the Munich Security Conference last month: that Germany needs to work to defend the rules-based order. “We Germans know that a world in which only power counts would be a dark place,” he said in Munich, adding that international law “protects our sovereignty and our freedom.”

Yet, since the war on Iran started he has avoided criticism of Washington. Indeed, he has explicitly condoned the attack, despite the fact that they happened without UN approval.

“Now is not the moment to lecture partners and allies,” he said, noting that…

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How should we imagine social media platforms and their purpose in a modern democracy? The idealistic vision of social media — one set out by Elon Musk upon his acquisition of Twitter in 2022 — is that it is a digital “town square”, the modern version of the Greek agora.

If that is the ideal, then it helps to ask a simple question: what would a healthy town square actually look like?

Athenian democracy was radical. It produced brilliant orators and reckless ones. It elevated philosophers and artists and empowered sophists. Ultimately, the populism of Athenian democracy — where public officials were chosen by lot and all citizens had the right to address the Assembly — ended in disaster.

But despite its inclusive interpretation of democratic participation, Athenian public debate operated within clear rules.

In fifth-century BC Athens, only citizens addressed the Assembly, and they did so as identifiable members of the polis whose reputations were at stake. They were not permitte…

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You could almost hear the astonishment in the journalist’s mouth as she typed the words into her keyboard. “Less alcohol is imbibed in Russia and the United Kingdom than here in Germany, even though the people of those countries have a reputation for uncontrolled drinking habits,” Der Spiegel noted in a recent article.

The shock runs deep. It turns out that the Brits, with their love of a Saturday-night binge, and the Russians, who allegedly sleep with a bottle of vodka under their pillow, are actually more sober than Germans.

In fact, almost everyone in Europe has brought their drinking habits under control in recent years, leaving only Romania and a few small Baltic states with worse hangovers than the Teutons.

The culprit, Germany’s media unanimously agree, is the state. Figures released last month show that Germany has the cheapest alcohol prices in the entire EU except for Italy. A bottle of booze in Finland costs one and a half times what…

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The first is clearly marked with makeshift fences and police vans. Dobrindt (CDU) announced that temporary border controls with all nine countries surrounding Germany would be extended for another six months as of March 1st, citing the need to curb irregular migration.

His ministry framed the move as part of a broader “Neuordnung” (restructuring) of Germany’s migration policy. A decade after “Wir schaffen das” became a global catchphrase, Germany has seen millions of people seek refuge or protection -- with around 2.7 million refugees and other protected persons currently residing in the country.

Faced with tighter budgets and mounting pressure from the right, the country is now far more cautious about who is allowed in -- and who is not.

The second barrier is far less visible, but just as consequential for many foreigners already living in…

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Dear Reader,

It is often forgotten that when Angela Merkel opened Germany’s borders at the height of Syria’s civil war, she also set a deadline for when the Syrians who arrived would be expected to leave.

Speaking in early 2016, Merkel said: “We expect that once peace returns to Syria and ISIS is defeated in Iraq, you will return to your homeland with the knowledge you have gained here with us.” Syrians were welcome to learn the language and find jobs, but their stay in Germany was “temporary,” she stressed.

Ten years later, the conditions Merkel set for a return appear to have been met. ISIS has been all but defeated, its fighters killed, arrested or driven into the desert. Syria’s brutal dictator, Bashar al-Assad, has fled, leaving power in the hands of Ahmed al-Sharaa, a former Islamist fighter. The year since Assad’s fall has seen parliamentary elections — but also sectarian massacres and gunfights between government loyalists and religious minori…

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