Europe risks losing its economic independence to global giants unless its leaders take urgent steps to restore competitiveness, German Chancellor Friedrich Merz warned.
Speaking in the Bundestag on Thursday ahead of the EU leaders’ summit in Brussels, Merz called for sweeping economic reforms, stressing that Europe’s place in the global economy depends on them.
“This is crucial for the future of our country and for Europe as a whole,” he said. “In the coming weeks, months, and perhaps years, it will be decided whether Europe remains an independent economic power or becomes a pawn in the game of the major centers in Asia and America.”
Domestically, Merz faces growing pressure to respond more decisively to a prolonged economic downturn. After two consecutive years of GDP contraction, analysts now forecast stagnation for the current year as well. One major factor is U.S. President Donald Trump’s tariff policy, which has hit Germany’s export-oriented economy particularly hard. Business leaders are urging the government to take bold steps to stimulate growth.
Merz’s coalition has pledged to reform the labor market and social welfare system. However, in recent weeks the chancellor has increasingly blamed Brussels for the lack of progress, urging the EU to simplify business regulations, strengthen the single market, and sign more trade agreements with other countries.
“Europe doesn’t have a problem with awareness — it has a problem with implementation,” Merz stressed. “I intend to raise this issue again with our European partners. Above all, it’s about the competitiveness of the European economy.”
According to Merz, concrete proposals already exist — in two reports by former Italian prime ministers Mario Draghi and Enrico Letta on strengthening the EU’s single market and improving its economic efficiency. “These two reports must not gather dust in the archives of the European Commission,” he said. “They should become part of the European Union’s agenda.”
The chancellor also urged the European Commission to take a more proactive role in advancing trade negotiations on behalf of the entire EU and to approve the agreement with the South American trade bloc Mercosur by the end of the year.