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Germany updates: Economy shrinks more than expected

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Germany updates: Economy shrinks more than expected

Emmy Sasipornkarn | Richard Connor with AFP, AP, dpa, Reuters, KNA, SID, epa

Published August 22, 2025last updated August 22, 2025

Europe’s largest economy has shrunk, with industrial production and construction weaker than first thought. Meanwhile, Berlin is being urged to recognize a Palestinian state. Follow DW for the latest.

Shipping containers in Hamburg
The value of Germany’s exports is down while imports are upImage: Marcus Brandt/dpa/picture alliance
Skip next section What you need to know

What you need to know

  • Germany’s economy fell by 0.3% in the second quarter of this year

  • Exports are down, imports are up, with output across several sectors falling

  • Reviving the economy is a top priority for Germany’s new government

  • A top former adviser to Angela Merkel has urged Berlin to recognize a Palestinian state

Stay tuned for the latest news and analysis on a range of issues connected with Germany from Friday, August 22:

Skip next section Bayern thrash Leipzig in Bundesliga opener

August 22, 2025

Bayern thrash Leipzig in Bundesliga opener

Min jae Kim , Lennart Karl , Harry Kane and Luis Diaz celebrate a goal for Bayern
Harry Kane (2nd from right) scored three second half goals, two of which were set up by Diaz (right)Image: Bernd Feil/M.i.S./IMAGO

Bayern Munich began their Bundesliga title defense with a romping 6-0 win over RB Leipzig.

England striker Harry Kane scored three times, French winger Michael Olise bagged a brace and Colombian Luis Diaz, who joined over the summer from Liverpool, scored on his debut at the Allianz Arena.

The huge win is an impressive opening statement from the reigning champions, who have won 12 of the past 13 German league titles. 

Bayern Munich's players celebrate with fans at the end of the German first division Bundesliga football match between FC Bayern Munich and RB Leipzig in Munich
Bayern’s quest for a 13th title in 14 season got off to the perfect startImage: Karl-Josef Hildenbrand/AFP
Skip next section WATCH: Antisemitic attacks rise sharply in Germany amid Gaza war

August 22, 2025

WATCH: Antisemitic attacks rise sharply in Germany amid Gaza war

Bernd Riegert

In Germany, antisemitic incidents have risen sharply since the October 7, 2023, Hamas terror attacks and the ensuing war in Gaza.

Police figures show attacks against Jews rose 20% last year. In Berlin, many are afraid to openly show that they are Jewish.

Skip next section Afghans with German resettlement rights urgently need visas

August 22, 2025

Afghans with German resettlement rights urgently need visas

German Commissioner for Human Rights and Humanitarian Assistance Lars Castellucci on Friday called on the German government to expedite the admission of Afghan men and women from Pakistan. 

The coalition government has agreed on “an orderly and humanitarian migration policy,” Castellucci wrote on X.

He warned that lengthy examinations of the Afghanistan admission program fulfill neither of those two goals.

Castellucci stressed that “anyone who has received a legally binding commitment to enter Germany under the federal admission program for Afghanistan must also be able to obtain a visa promptly.” 

On Monday, the German Foreign Ministry reported that 211 Afghans who were approved for resettlement in Germany were deported back to Taliban-ruled Afghanistan from Pakistan, where they had been temporarily based in hopes of eventually relocating to Europe. 

Skip next section Packages from Germany to US restricted over Trump tariffs

August 22, 2025

Packages from Germany to US restricted over Trump tariffs

Emmy Sasipornkarn | Darko Janjevic Editor

German-based logistic company DHL has announced temporary restrictions on package deliveries to the United States due to tariffs imposed by US President Donald Trump. 

DHL said that from Saturday, its standard category of package delivery to the US, the preferred option for many small businesses, would be temporarily suspended.

“The reason for these anticipated temporary restrictions is new processes required by US authorities for postal shipping,” according to a DHL statement.

“Key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future,” the statement added.

However, a more expensive “express” service for packages weighing up to 70 kilograms (154 pounds) will still be offered.

Last month, Trump signed an executive order ending the so-called “de minimis” exemption, which allowed international shipments under $800 (€688) to be shipped into the US duty-free. This tax break will no longer apply from August 29.

Skip next section Berlin court blocks change of controversial street name

August 22, 2025

Berlin court blocks change of controversial street name

Street signs showing the names
It’s likely that the halting of the official name change will only be temporaryImage: dpa

A Berlin court has stopped the planned renaming of a controversially-named street to Anton-Wilhelm-Amo-Strasse just before the official unveiling.

The Administrative Court ruled Friday that the street cannot be renamed while a resident’s lawsuit against the process is still pending. The court said there was no urgent need to complete the change.

Berlin’s Mitte district and several activist groups have long argued the current name Mohrenstrasse (respectfully referred to as M-Strasse) is racist, since the word “Mohr” was historically used in a derogatory way for people of African descent.

The new name would honor Anton Wilhelm Amo, an 18th-century African-born scholar who became the first known Black philosopher and lawyer at a German university.

Signs with the new name had already been installed, and the unveiling was set for Saturday, the International Day for the Remembrance of the Slave Trade and its Abolition. The Initiative of Black People in Germany said it would hold a gathering regardless.

The dispute dates back to 2021, when the Mitte district parliament first approved the renaming. Several residents sued, arguing the old name was not racist but part of Berlin’s history. The Higher Administrative Court had cleared the change in July, but other lawsuits remain unresolved.

In its latest ruling, the Administrative Court clarified that the renaming is delayed but likely not canceled, saying it is “highly unlikely” the resident’s claim will succeed. Similar debates over street names linked to colonialism, racism, antisemitism, or the Nazi era have played out across Berlin in recent years.

Skip next section Economy minister calls for bold reforms after poor economic figures

August 22, 2025

Economy minister calls for bold reforms after poor economic figures

Economy Minister Katherina Reiche has urged rapid structural reforms to strengthen Germany’s competitiveness after weak economic data.

“The figures highlight the urgent need for action,” Reiche said Friday. “The federal government has already taken initial steps to provide relief. But in order for the German economy to become competitive, further-reaching and bold structural reforms are indispensable. Only in this way can we return to stable growth.”

She stressed the need for quick implementation: “It is now crucial to swiftly implement bold structural reforms — for example in making working hours more flexible, reducing non-wage labor costs, cutting back bureaucratic hurdles and lowering energy prices.”

Reiche also cautioned against raising taxes. “The tax burden for companies in Germany is already high. We need to talk about further reductions, not increases in the tax load.”

Skip next section Berlin panda twins celebrate first birthday with icy treats

August 22, 2025

Berlin panda twins celebrate first birthday with icy treats

Berlin panda pair Leni and Lotti
The cubs enjoyed some chilled treats as part of their birthday celebrationImage: Sebastian Gollnow/dpa/picture alliance

Berlin Zoo’s panda twins Leni and Lotti have marked their first birthday with a special surprise of frozen vegetable juice balls.

Keepers carried the 21-kilogram cubs into the outdoor enclosure Friday morning, where red and orange balls of frozen beetroot and carrot juice awaited alongside a wooden number one and an oversized candle topped with a frozen carrot flame.

Head keeper Norbert Zahmel said the twins now respond to their caretakers’ voices but cannot yet be reliably guided to the climbing area, which is why they were carried in. “Compared with other large bears, brain development in pandas is somewhat slower,” he said. “But they make up for it later.”

At first hesitant, the cubs grew bolder as they explored the birthday setup — and became more lively once their mother, Meng Meng, joined in.

Skip next section Drunk woman forces plane to make emergency landing in Germany

August 22, 2025

Drunk woman forces plane to make emergency landing in Germany

A drunk passenger caused a disturbance on a flight from England to Cyprus, resulting in an unscheduled stop at Cologne/Bonn Airport in western Germany on Thursday evening.

The 41-year-old women allegedly punched, kicked, insulted, and threatened fellow passengers and crew members, according to a statement released by Germany’s Federal Police on Friday morning.

The flight was bound for Larnaca from Manchester.

A test showed that the woman had a very high blood alcohol level.

According to the federal police, the British citizen will be sent back to her home country after being released from custody. 

No one was injured in the incident, police said.

Skip next section German ex-security adviser urges Berlin to recognize Palestinian state

August 22, 2025

German ex-security adviser urges Berlin to recognize Palestinian state

Former Munich Security Conference chairman Christoph Heusgen has urged the German government to recognize a Palestinian state, citing the humanitarian situation in Gaza.

In a guest article for the RND media group published Friday, Heusgen wrote that recognition would be viewed worldwide as a “particularly strong gesture” given Germany’s reputation as a close ally of Israel.

He said the step would not alter conditions immediately but would signal solidarity with Palestinians if Berlin joined the majority of countries that already extend recognition.

Heusgen, a longtime adviser to former Chancellor Angela Merkel, pointed to momentum ahead of the UN General Assembly in September, where France, Canada, and Australia are among those planning to recognize a Palestinian state.

However, the German government has pushed back on the idea. Spokesman Stefan Kornelius said in late July that recognition is considered “one of the final steps” toward a two-state solution, which foresees an independent Palestine coexisting peacefully alongside Israel.

More than half of Germans now support recognizing a Palestinian state, a recent poll showed.

Skip next section German economy has contracted in second quarter

August 22, 2025

German economy has contracted in second quarter

Germany’s gross domestic product has fallen by 0.3% in the second quarter of 2025 compared with the first, showing Europe’s largest economy losing momentum.

The Federal Statistical Office said the decline was 0.2 points steeper than in its flash estimate from July 30, with weaker-than-expected industrial production driving the revision. GDP had grown 0.3% in the first quarter and 0.2% in the last quarter of 2024.

Data showed that both manufacturing and construction output in June deteriorated more than first assumed. Private consumption was revised down after service-sector statistics, including hospitality figures, pointed to weaker demand.

Exports of goods and services edged 0.1% lower, weighed by a 0.6% decline in goods exports, while service exports rose 1.4%. Imports rose a strong 1.6%.

Gross value added across the economy fell 0.2%. Construction slumped 3.7%, manufacturing dropped 0.3%, and trade, transport, and hospitality declined 0.6%. By contrast, information and communications and business services each grew 0.5%, but public services, education, and health flatlined.

Germany has been the only G7 economy to stagnate for the past two years and now faces the prospect of a third straight year of contraction, which would be a first in the country’s postwar history.

Reviving growth has become a top priority for the new government as trade tensions mount. US President Donald Trump imposed a baseline tariff of 10% on April 5, raising fears of further damage to Germany’s export-driven economy.

Skip next section Welcome to our coverage

August 22, 2025

Welcome to our coverage

Richard Connor | Louis Oelofse Editor

Guten Tag from the DW newsroom in Bonn.

You join us as news comes in that Germany’s economy has slipped back into negative territory.

New figures show GDP fell 0.3% in the second quarter of 2025, a sharper drop than first thought. This is sure to increase pressure on Chancellor Friedrich Merz’s government.

Meanwhile, a former top security adviser to the German government has said Berlin should recognize a Palestinian state.

We will follow these and other developments in this blog throughout the day. 

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