EU Commission warns of Germany’s worrying economic situation

The poor economic situation in Germany and nine other European Union countries could have negative consequences for the entire bloc, the European Commission warned in a report published on Wednesday.

The “macroeconomic imbalances” in these countries raised concerns in the so-called Alert Mechanism Report and will now be analysed in greater depth, the commission announced in Strasbourg, France.

“The EU is confronted with serious structural challenges which threaten our long-term prosperity,” said EU Economy Commissioner Valdis Dombrovskis.

“Urgent action is needed,” he warned.

The aim of the report is to detect and tackle such issues early on. Assessed indicators include the unemployment rate, debt levels, credit flows and property prices.

Macroeconomic imbalances in one EU country – for example a high current account deficit or a real estate bubble – can have spill-over effects on other member states.

The unusually high inflation of recent years, including increased labour costs and property prices, has taken its toll, according to the commission.

In addition to Germany, which has long been seen as Europe’s powerhouse, Cyprus, Greece, Italy, Hungary, Estonia, Romania, Slovakia, Sweden and the Netherlands will also be analysed more closely in 2025.

The poor economic situation in Germany and nine other European Union countries could have negative consequences for the entire bloc, the European Commission warned in a report published on Wednesday.

The “macroeconomic imbalances” in these countries raised concerns in the so-called Alert Mechanism Report and will now be analysed in greater depth, the commission announced in Strasbourg, France.

“The EU is confronted with serious structural challenges which threaten our long-term prosperity,” said EU Economy Commissioner Valdis Dombrovskis.

“Urgent action is needed,” he warned.

The aim of the report is to detect and tackle such issues early on. Assessed indicators include the unemployment rate, debt levels, credit flows and property prices.

Macroeconomic imbalances in one EU country – for example a high current account deficit or a real estate bubble – can have spill-over effects on other member states.

The unusually high inflation of recent years, including increased labour costs and property prices, has taken its toll, according to the commission.

In addition to Germany, which has long been seen as Europe’s powerhouse, Cyprus, Greece, Italy, Hungary, Estonia, Romania, Slovakia, Sweden and the Netherlands will also be analysed more closely in 2025.