German Recovery Plan Stalls Amid Coalition Gridlock and Rising Unemployment

Friedrich Merz's ambitious 500-billion-euro recovery plan faces mounting challenges as implementation lags and public discontent grows. Unemployment has surpassed three million for the first time in a decade, fueling skepticism about the government's economic stewardship.

Reuters polling reveals a stark shift in sentiment, with 61% of Germans now expecting economic deterioration—up from 50% in May. This disillusionment is bolstering support for the far-right AfD, which currently leads several national polls.

Coalition friction between Merz's conservatives and their SPD partners has crippled reform momentum. Labor Minister Baerbel Bas's commission on jobless benefits has delayed action until year-end, while half-measures on corporate regulations and energy taxes fail to address Core concerns.