Is Germany's economy back on the up? The answer to that question depends on your perspective.
At the 2026 Mechanical Engineering Summit in Berlin this week, the mood was sullen. "A year ago, I said here: We are angry. Today I must say: We are stunned," Bertram Kawlath, president of the Mechanical Engineering Industry Association (VDMA), said in his opening remarks on Tuesday.
The mechanical and plant engineering sector was the backbone of German industry for decades. It once employed more than a million people; now 15,000 positions are being cut every month. Production has shrunk about 20% since 2018.
Kawlath criticized the federal government's infighting and lack of reform, as well as what the companies consider a continued high bureaucracy and tax burden.
"[We are] stunned by the whitewashing in so many government statements. Stunned by the increasingly visible decline of our country as a business location."
German Chancellor Friedrich Merz promised quick reforms and a rapidly noticeable economic upswing when he took office in May 2025. A year and a half later, reality has caught up with him.
Merz's coalition of his conservative Christian Democratic Union (CDU), its Bavarian sister party the Christian Social Union, (CSU), along with the center-left Social Democrats(SPD), keeps running into trouble. In addition, there are crises and wars.
