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flag Germany's economy faces a bleak 2026 outlook due to weak growth, high energy costs, and slow reforms despite policy promises.

flag German Chancellor Friedrich Merz has warned of a "very critical" economic outlook for Germany in 2026, citing weak growth, high energy costs, declining exports—especially to the U.S.—and slow structural reforms. flag Despite pledges of public investment, tax cuts, and legal reforms, business leaders say progress remains too slow. flag The economy contracted in 2023 and 2024, with 2025 growth projected near 0.1%. flag Inflation eased to 1.8% in December 2025. flag Meanwhile, Brandenburg’s coalition collapsed over internal disputes, prompting a minority government, and Berlin faced power outages after a sabotage incident. flag Merz reiterated support for Ukraine, emphasizing frozen Russian assets as a key aid source.

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