German Chancellor Angela Merkel intends to step down from her role in 2021, but political chaos has plagued her country before she has even departed, and could materialise into a wider problem for the EU. Mrs Merkel’s Christian Democratic Union party is heading a tense coalition with its sister party in Germany, the Christian Social Union, and also the Social Democratic Party. This has led to political fallout between the parties as they attempt to jostle for increased control, with many analysts suggesting the coalition could fall apart soon.
Germany’s political stand-still has coincided with economic woes as well, which could have implications for its neighbours in the EU.
Mrs Merkel’s government only narrowly avoided a technical recession last year, with Berlin’s economy growing by just 0.1 percent in the third quarter of the year, despite many economists predicting further contraction.
While many have called on the government in Germany to revitalise the economy with investment, Mrs Merkel has shown reluctance as she remains weary to the risk of increased debt.
As CNBC reported this week, opposition figures in Germany have raised notable concerns over Germany’s car industry, with analyst Michael Browne warning that job cuts and a decrease in sales will plague the industry in the next five to ten years.
EU news: Germany nearly went into a recession
EU news: Merkel will step down in 2021
Germany’s economy has played a crucial role in both elevating the EU’s economic status while also preventing it from crumbling.
When countries such as Greece, Spain and Portugal have been plunged into debt, the eurozone has appeared on the brink.
But due to its mammoth economy, Berlin has been able to fend off financial turmoil across the continent.
In fact, Germany has accounted for more than a quarter of the eurozone’s economic output in recent years.
Now, though, with its economy stalling, Germany could be the epicentre of a European financial slowdown, all while uncertainty over the bloc’s future relationship with the departing UK rumbles on.
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EU news: Much of the bloc is dependent on Germany
Countries that rely on Germany as their biggest trading partner include France, Italy, the Netherlands, Belgium, Slovakia and Sweden.
World Bank data shows that this can even border on dependency in some countries.
Germany accounts for 27 percent of Poland’s foreign trade. Britain, Poland’s second biggest trading partner, accounts for only 6 percent.
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EU news: Brexit could also complicate Europe’s economic situation
EU news: Johnson won a huge majority in December’s election
While less likely due to Boris Johnson’s huge election victory, should Britain’s Brexit negotiations with Brussels break down and a no deal departure ensue, goods, including German cars, will find themselves motionless by the English Channel.
While Britain’s departure from the bloc is less problematic for Germany than was feared before December’s general election, euroscepticism is haunting Mrs Merkel’s government from within her country.
Anti-European sentiment has gained more notoriety in Germany, with the right-wing Alternative for Germany Party winning 12 percent of the vote in 2017, tripling their percentage in 2013.
As Europe seeks to fight off economic unrest, the EU will be praying Germany gets its house in order, and for Brexit negotiations to end smoothly.