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11 May Briefing Read full brief

A weary Merz fights to defend his first year as security threats from Russia and IS multiply

ifo's business-confidence index has fallen to its lowest reading since May 2020 a year into Friedrich Merz's chancellorship, with bankruptcies at their post-2008 high and the Federation of German Industries warning Germany is "under existential threat" as an industrial centre. In a response to a Greens inquiry the government told the Bundestag that Russian intelligence is outsourcing assassinations and sabotage to organised crime for plausible deniability, and Hamburg police arrested a 17-year-old Syrian over an IS-inspired fertilizer bomb plot on a shopping centre and a police station.

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German business confidence falls to pandemic-era low one year into Merz's chancellorship as industry groups warn of 'existential threat'

One year after Friedrich Merz took office promising an "economic turning point," the ifo Institute's business-confidence index has fallen to its lowest level since May 2020, with bankruptcies at their highest in more than a decade and pessimistic expectations tied to the Iran war, the Strait of Hormuz blockade and high oil prices. The Federation of German Industries said almost none of the structural reforms promised have been delivered and that Germany's position as an industrial centre is "under existential threat," with what investment there is going abroad. Merz, addressing the CDU's Economic Day in early May 2026 — the same forum that had cheered him a year earlier — said he understood the "dire" mood but blamed coalition arithmetic with the SPD: "You don't change a country in a week or a month."

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Germany warns Russia uses organized crime for assassinations and sabotage

The German government warned that Russian intelligence services are increasingly outsourcing assassination and sabotage operations to organized crime networks, citing the benefit of "plausible deniability" for the Kremlin. The warning came in a response to a parliamentary inquiry by the Greens, seen by the Frankfurter Allgemeine Zeitung. Marcel Emmerich, the Greens' interior expert, said the growing ties between Russian state structures and criminal actors pose a threat to Germany's internal security.

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German police arrest 17-year-old Syrian for plotting IS-inspired bomb attack in Hamburg

German police arrested a 17-year-old Syrian in Hamburg on Thursday for allegedly preparing a bomb attack inspired by the Islamic State militant group. The suspect had scouted targets including a shopping center and a police station, and had already obtained fertilizer for the attack, prosecutors said Monday. He also considered using Molotov cocktails or a knife as alternative methods.

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Europe Shrugs Off Trump's Latest Threats as Leaders Signal Growing Resilience

European leaders have responded with muted alarm to U.S. President Donald Trump's latest threats, including plans to withdraw 5,000 troops from Germany, reflecting a shift from past panic. German Defense Minister Boris Pistorius called the troop withdrawal decision "foreseeable," while Spanish Defense Minister Margarita Robles said Europe must strengthen its NATO pillar. The continent has bolstered its own defense capabilities, including Germany's suspension of its debt brake and the EU's 800-billion-euro Readiness 2030 initiative, reducing its vulnerability to U.S. pressure.

Day in Review

All Events

Every other event tracked in Germany, with a one-line preview.

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German economy minister warns of higher flight prices but rejects alarmism over jet fuel supply

Background: German politicians and airlines have clashed over the response to jet fuel shortages and price spikes caused by the Iran war and Strait of Hormuz blockade. Today: Economy Minister Katherina Reiche warned that rising kerosene prices, driven by the Iran war and disrupted oil transport via the Strait of Hormuz and the Druzhba pipeline, will increase flight costs for consumers. She dismissed fears of major flight cancellations, stating that fuel reserves remain adequate, and criticized 'alarmism' in public debate. Reiche made these remarks during a visit to the PCK oil refinery in Schwedt, which produces fuel for Berlin's BER airport.

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Background: German politicians and airlines have clashed over the response to jet fuel shortages and price spikes caused by the Iran war and Strait of Hormuz blockade. Today: Economy Minister Katherina Reiche warned that rising kerosene prices, driven by the Iran war and disrupted oil transport via the Strait of Hormuz and the Druzhba pipeline, will increase flight costs for consumers. She dismissed fears of major flight cancellations, stating that fuel reserves remain adequate, and criticized 'alarmism' in public debate. Reiche made these remarks during a visit to the PCK oil refinery in Schwedt, which produces fuel for Berlin's BER airport.

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One in nine German internet users fell victim to cybercrime in 2025, study finds

The Cybersicherheitsmonitor 2026 report by Germany's BSI and police crime prevention bodies, based on a representative survey of 3,060 people aged 16 and over conducted in January 2026, shows that 11% of German internet users were victims of cybercrime in 2025, a rise from 7% in 2024. Online shopping fraud was the most common crime (22%), followed by account hijacking (14%) and banking fraud (13%). 88% of victims suffered damage, with 33% experiencing financial loss. Despite high victim rates, 55% of respondents consider their personal risk low, and only 14% regularly inform themselves about cybersecurity. Awareness of protective measures is limited to strong passwords and antivirus software, used by 46% and 40% respectively. Only 32% of victims file police reports, highlighting a gap in public awareness and protective measures.

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The Cybersicherheitsmonitor 2026 report by Germany's BSI and police crime prevention bodies, based on a representative survey of 3,060 people aged 16 and over conducted in January 2026, shows that 11% of German internet users were victims of cybercrime in 2025, a rise from 7% in 2024. Online shopping fraud was the most common crime (22%), followed by account hijacking (14%) and banking fraud (13%). 88% of victims suffered damage, with 33% experiencing financial loss. Despite high victim rates, 55% of respondents consider their personal risk low, and only 14% regularly inform themselves about cybersecurity. Awareness of protective measures is limited to strong passwords and antivirus software, used by 46% and 40% respectively. Only 32% of victims file police reports, highlighting a gap in public awareness and protective measures.

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German state premiers declare €1,000 bonus dead, push for income tax reform

The German Bundesrat rejected a proposed tax-free €1,000 employer bonus for employees. Following this, state premiers from both CDU/CSU and SPD, including Markus Söder (CSU, Bavaria) and Manuela Schwesig (SPD, Mecklenburg-Vorpommern), publicly declared the bonus 'dead' and urged the federal government to abandon it. They instead called for a comprehensive income tax reform to provide lasting relief for low and middle incomes. Söder ruled out raising the top tax rate (42%) or inheritance tax but left open debate on the wealth tax (45%). Schwesig proposed a 'concerted action' involving federal, state, and local governments, unions, and employers. The government has not decided whether to pursue the bonus further or invoke the mediation committee; all options are under review. The coalition committee is scheduled to meet on Tuesday to discuss next steps.

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The German Bundesrat rejected a proposed tax-free €1,000 employer bonus for employees. Following this, state premiers from both CDU/CSU and SPD, including Markus Söder (CSU, Bavaria) and Manuela Schwesig (SPD, Mecklenburg-Vorpommern), publicly declared the bonus 'dead' and urged the federal government to abandon it. They instead called for a comprehensive income tax reform to provide lasting relief for low and middle incomes. Söder ruled out raising the top tax rate (42%) or inheritance tax but left open debate on the wealth tax (45%). Schwesig proposed a 'concerted action' involving federal, state, and local governments, unions, and employers. The government has not decided whether to pursue the bonus further or invoke the mediation committee; all options are under review. The coalition committee is scheduled to meet on Tuesday to discuss next steps.

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Far-right 'Free Saxons' party leads mayoral election in Aue-Bad Schlema, Germany

Stefan Hartung, vice-chairman of the far-right 'Free Saxons' party, won the first round of the mayoral election in Aue-Bad Schlema, Saxony, on May 11, 2025, with 27.4% of the vote. The party is classified as extremist by German domestic intelligence. A runoff will be held on June 7, as no candidate achieved an absolute majority. The result has alarmed mainstream parties and underscores the growing influence of right-wing extremism in the region.

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Stefan Hartung, vice-chairman of the far-right 'Free Saxons' party, won the first round of the mayoral election in Aue-Bad Schlema, Saxony, on May 11, 2025, with 27.4% of the vote. The party is classified as extremist by German domestic intelligence. A runoff will be held on June 7, as no candidate achieved an absolute majority. The result has alarmed mainstream parties and underscores the growing influence of right-wing extremism in the region.

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DGB re-elects Fahimi, warns against welfare state cuts; coalition debates alternative relief after bonus rejection

German trade unions have been protesting government-proposed cuts to pensions, healthcare, and social benefits. At the DGB congress in Berlin, chair Yasmin Fahimi was re-elected with 96.1% of delegate votes, where she defended the welfare state and warned against cuts to social benefits and workers' rights. The congress also featured a planned speech by Chancellor Friedrich Merz. Meanwhile, the Bundesrat rejected a planned 1,000-euro employer bonus, prompting coalition and opposition figures to propose alternative relief measures such as income tax reform. The first directly elected AfD mayor in Brandenburg was reported, and security politicians warned about a potential AfD state government in Saxony-Anhalt. Justice Minister Hubig announced plans to tighten murder laws to better prosecute femicides.

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German trade unions have been protesting government-proposed cuts to pensions, healthcare, and social benefits. At the DGB congress in Berlin, chair Yasmin Fahimi was re-elected with 96.1% of delegate votes, where she defended the welfare state and warned against cuts to social benefits and workers' rights. The congress also featured a planned speech by Chancellor Friedrich Merz. Meanwhile, the Bundesrat rejected a planned 1,000-euro employer bonus, prompting coalition and opposition figures to propose alternative relief measures such as income tax reform. The first directly elected AfD mayor in Brandenburg was reported, and security politicians warned about a potential AfD state government in Saxony-Anhalt. Justice Minister Hubig announced plans to tighten murder laws to better prosecute femicides.

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Global race to escape US software dependence accelerates with open-source migrations

Governments worldwide are moving to reduce reliance on US proprietary software, driven by security concerns and the need for algorithmic transparency. Europe leads with initiatives like Gaia-X and national migrations (Germany's Schleswig-Holstein, France's gendarmerie), while China, South Korea, and Turkey develop domestic operating systems. The trend extends to sovereign AI models.

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Governments worldwide are moving to reduce reliance on US proprietary software, driven by security concerns and the need for algorithmic transparency. Europe leads with initiatives like Gaia-X and national migrations (Germany's Schleswig-Holstein, France's gendarmerie), while China, South Korea, and Turkey develop domestic operating systems. The trend extends to sovereign AI models.

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Germany Upgrades FRISC for F126 Frigates with C4ISR Package

A contract amendment between MST, Damen Naval, and BAAINBw resolves design challenges and introduces a C4ISR enhancement package for the Fast Raiding, Interception and Special Forces Craft (FRISC) for the German Navy's F126 frigate programme. The upgrade includes integrated communications, enhanced situational awareness, mission architecture, and crew performance improvements, transforming the platform into a network-enabled asset. This development strengthens the operational flexibility and maritime security capabilities of the German Navy.

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A contract amendment between MST, Damen Naval, and BAAINBw resolves design challenges and introduces a C4ISR enhancement package for the Fast Raiding, Interception and Special Forces Craft (FRISC) for the German Navy's F126 frigate programme. The upgrade includes integrated communications, enhanced situational awareness, mission architecture, and crew performance improvements, transforming the platform into a network-enabled asset. This development strengthens the operational flexibility and maritime security capabilities of the German Navy.

Frequently Asked

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How has German business sentiment changed under Merz?
The ifo Institute's business sentiment survey fell to its lowest level since May 2020, and bankruptcies reached their highest level since the post-2008 crisis.
What did the Federation of German Industries say about Merz's reforms?
The Federation said 'hardly any of the urgently needed structural reforms that were announced have been implemented' and warned Germany's industrial center is under 'existential threat.'
What security threats from Russia were reported?
The federal government told the Bundestag that Russian intelligence is outsourcing assassination and sabotage operations to organized crime for plausible deniability.
What Islamic State-related plot was foiled in Germany?
Hamburg police arrested a 17-year-old Syrian accused of preparing an Islamic State-inspired bomb attack; he had obtained fertilizer and scouted targets.
What was the cybercrime rate in Germany in 2025?
11 percent of German internet users fell victim to cybercrime in 2025, up from 7 percent in 2024, with online shopping fraud being the most common offense.