Chancellor Merz Highlights Critical Economic Challenges and Job Losses in Germany as 2026 Begins

At the start of 2026, German Chancellor Friedrich Merz addressed coalition members in a letter that underscored the dire state of the nation's economy, emphasizing widespread job losses in numerous companies across various industries. Merz described the situation as "very critical," noting that large industrial sectors, the middle class, and skilled trades face enormous challenges, resulting in significant employment reductions.

Merz acknowledged that previous policy decisions had failed to sufficiently improve Germany's economic competitiveness and stressed the urgent need for the government to make the right political and legislative moves to foster business conditions and stimulate economic growth. His letter stressed revitalizing Germany's economy as a priority for 2026.

In addition to economic concerns, Merz reaffirmed Germany's steadfast support for Ukraine in its defense against Russian aggression. He highlighted plans to use frozen Russian assets to provide financial backing for Ukraine and called for a swift ceasefire that respects Ukraine's sovereignty, all while maintaining Germany's determined stance against Russia.

The Chancellor concluded his message by urging coalition lawmakers to work toward restoring public trust in politics by effectively addressing economic and political challenges, thus reinforcing the democratic process and the market economy's value.

This communication offers key insight into Germany's economic difficulties at the beginning of the year, with Chancellor Merz publicly acknowledging the job losses afflicting many companies and industries and outlining the government's approach to addressing these issues through renewed policy focus and international commitments.