Merz Acknowledges Dire German Business Mood 1 Year Into Stagnation

5 articles · Updated · DW (English) · May 11

At Economic Day in early May 2026, Friedrich Merz said Germany’s mood was “exceedingly dire,” conceding business disappointment one year after taking office promising an economic turnaround.
Business groups say that turnaround has not arrived: the BDI reported hardly any promised structural reforms were implemented, while chambers and craft associations cited costly bureaucracy, persistent strain and growing frustration.
Confidence has sunk to its lowest level since May 2020, bankruptcies have climbed to their highest level in more than a decade, and companies that are still investing are doing so mainly abroad.
The ifo Institute says pessimism now spans all sectors, with the Iran war, Middle East disruption, high oil prices and Hormuz bottlenecks worsening inflation and erasing hopes of a near-term rebound.
Merz blamed part of the slow progress on coalition constraints with the SPD, ruled out new elections and insisted he would lead the current government to success despite falling faith in a quick recovery.

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