Angela Merkel has held firm to her frugal budget policy, angering European neighbors who would like to see Germany create more demand via investment. But for the country’s export-oriented economy the weak euro, excellent products and the world’s highest productivity mean great business. German firms are mostly doing well, creating jobs and paying lots of taxes: for the first time in almost 50 years the country boasts a balanced federal budget. Merkel’s to-do list remains long, though.
01 Defence investment
Voices at home and abroad call for more international engagement (read: support of military interventions). The case seemed rather uncontroversial until major shortcomings in the Bundeswehr’s infrastructure surfaced: equipment is old or faulty, while many aircraft are grounded because of missing spare parts. Defence minister Ursula von der Leyen, seen by many as a likely successor to Merkel, will have to beef up spending.
02 Integration of immigrants
Germany likes to see itself as a multicultural melting pot and in cities such as Berlin this may be true. But a sudden spike in refugees from the world’s hot spots may change this. In the first seven months of 2014 almost 100,000 people sought asylum, 60 per cent more than in all of 2013. Recently an ugly case of abuse in refugee homes raised public concerns and the German association of cities is demanding more money and legislative reform to tackle the issue.
03 Exporting the Energiewende
Renewable energies were the largest contributors to German power consumption in 2014 for the first time. That wind, sun and biomass fuel one of the world’s most advanced economies is a huge step and hopefully sets an example for other countries to follow. German engineering is already at the core of this Energiewende (“energy turnaround”) and it could be the case abroad as well. Electric cars from BMW and Volkswagen could boost international popularity for saving the planet the German way: via hi-tech and innovative means.