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Germany
Reunified 1990· Country
FactTreaties, membership, measured data, events.
Europe's largest economy, with about 83.5 million people, now rearming after decades of military restraint.
See it on the Geopolitics map →The picture
Federal parliamentary republic; GDP about $4.7 trillion, third-largest in the world. Strengths: export industry (cars, machinery, chemicals), skilled workers and low public debt (about 63% of GDP). Weaknesses: near-zero growth in 2023–25, high energy costs after losing Russian gas, Chinese competition, aging and slow bureaucracy. Friedrich Merz's center-right and Social Democrat coalition faces a surging AfD. Ties: NATO, EU, G7; hosts about 35,000 US troops. Investing: Germany ETFs or DAX funds; SAP, Siemens, Allianz, carmakers and Rheinmetall.
Why it matters
German money and industry decide whether Europe can rearm and stay competitive; its break with cheap Russian gas and fading Chinese demand reshapes the continent.
Key facts and numbers
Destatis and IMF data, Bundestag budget laws, Bundesbank reports and official election results.
What to watch
Whether heavy new borrowing for defense and infrastructure revives growth, and whether the AfD, which won about 44% in Saxony-Anhalt in 2026, can be kept from power.
Inside this (1)
Connections (3)
▸Friedrich Merz leads GermanyFact
The relationship
Merz turned the CDU/CSU's 2025 election win into a coalition with the Social Democrats and set its agenda: borrowing for defense and infrastructure, tighter migration rules and a tougher line on Russia. His room to maneuver is limited by a slim majority and an AfD that rivals his party in national polls.
Since when and why
Berlin; Bundestag election on February 23, 2025; elected chancellor on the second ballot on May 6, 2025, with SPD leader Lars Klingbeil as vice-chancellor and finance minister.
How we know
Bundestag voting records and the published coalition agreement establish his office and program.
What to watch
Whether the coalition lasts until the 2029 election, and whether the CDU keeps its refusal to cooperate with the AfD (the 'firewall') under pressure from eastern states.
▸Germany is the biggest spender in European rearmament (ReArm Europe)Widely agreed
The relationship
Germany has the largest defense budget among Europe's NATO members in cash terms: about €108 billion in 2026, including its special fund, on a path to roughly €150 billion, or 3.5% of GDP, by 2029. It is buying air defenses, tanks and long-range weapons and aims to build Europe's strongest conventional army.
Since when and why
Berlin, the 2025 and 2026 federal budgets; Merz's goal, stated in 2025, of making the Bundeswehr Europe's strongest conventional army.
How solid?
Bundestag budget laws and NATO spending data; Poland spends more as a share of GDP, but Germany spends the most in euros.
What to watch
Whether Germany can recruit enough soldiers (about 186,000 active in early 2026, well short of targets) and whether its arms industry can deliver on time.
▸Germany lost cheap pipeline gas from RussiaFact
The relationship
For decades Germany bought cheap Russian pipeline gas, about 55% of its gas imports in 2021, betting that trade would tame Moscow. After the 2022 invasion Russia cut Nord Stream flows and the pipelines were blown up. Germany built LNG terminals and turned to Norway, but higher energy costs hit its industry hard.
Since when and why
Baltic Sea: Nord Stream flows halted on August 31, 2022; explosions on September 26, 2022 wrecked three of four pipeline strings; Germany's first LNG terminal opened in December 2022.
How we know
Gas-flow data, seismic records of the blasts and German import statistics; German prosecutors seek Ukrainian suspects, one extradited from Italy in 2025.
What to watch
Who ordered the Nord Stream sabotage is unresolved; Kyiv denies involvement. Whether Russian gas returns after the war is debated, though an EU law phases it out by late 2027.