Germany is governed by Chancellor Friedrich Merz's centre-right CDU/CSU-SPD coalition, which faces internal strain after Labor Minister Bärbel Bas's resignation and external pressure from the far-right AfD, which leads national polls and has proposed scrapping EU Parliament elections. The economy shows mixed signals: GDP grew 0.2% in Q3 2026 (Eurostat) while inflation held at 2.8% in October 2026 (Eurostat), but the automotive sector is under pressure with Volkswagen reporting a €5.8 billion Q3 2026 loss and German carmakers' China deliveries falling by a third since 2019.
