Friedrich Merz, the chancellor candidate for the conservative Christian Democratic Union, acknowledged the need for a “major effort” to revive the economy as his party pledges to return German growth to 2 percent over the next five years through changes to the welfare and tax systems.

Germany's economy contracted for the second consecutive year in 2024, highlighting the depth of the downturn gripping Europe's biggest economy. Germany's economy shrank by 0.2% over the full year - in line with economists' forecasts - and by 0.

The weakness underlines the challenge that will face a new government in Berlin following elections in February, including the possibility of fresh Trump tariffs.

Germany’s economy shrank for a second consecutive year in 2024 and is unlikely to grow much in 2025, laying bare the challenge for the country’s new government once snap elections are held in February.