Germany’s ‘perfect storm’: A structural crisis for the EU’s engine?

Germany is facing significant challenges in its foreign and economic policies, most notably the loss of Russian energy supplies, managing the economic partnership with China amid growing geopolitical tensions and, more recently, the prospect of an unfriendly US administration under Donald Trump. Domestically, Berlin is grappling with the consequences of long-term underinvestment in public infrastructure, limited innovation capacity, and sluggish productivity growth. Anti-establishment parties, particularly the far right, have gained popularity, limiting options for coalition governments after the February 2025 election. At the EU level, Germany’s leadership and its partnership with France have suffered setbacks. At the same time, no credible alternatives have emerged that could potentially replace the leading role of the Franco-German tandem. The next German government will have to contend with a deteriorating economic situation, as well as the long-term foreign policy challenges faced by the outgoing government.