Mercedes-Benz CEO Ola Källenius has issued a stark warning about Germany’s economic situation in a recent interview with Der Spiegel magazine published around early February 2026.
He stated that Europe’s largest economy has been heading in the wrong direction for about 10 to 15 years, leading to prolonged stagnation. Källenius expressed concern that if this trend continues without reversal, it could fuel a rise in right-wing populism with parties like the AfD potentially gaining ground, as “the populists on the right will come along, and they have no solutions for anything.”
Previously, this was offset by superior productivity, but that edge has eroded due to a declining work ethic and reduced willingness to perform. He compared Germany’s current competitiveness to a national football team that thinks it’s training enough while others train twice as hard.
While defending the right to part-time work for childcare or caregiving, he urged the population in general to “work more” or “work more hours” to prevent the country’s “unique productivity engine” from slowing further.
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Broader reforms are needed in areas like energy, taxes, and labor to make investment and entrepreneurship attractive again, or capital will flow elsewhere. This comes amid ongoing challenges for the German economy, including stagnation, high costs, and pressures on industries like automotive manufacturing where Mercedes-Benz itself operates.
Germany’s economy shows signs of emerging from prolonged stagnation with near-zero or slightly positive growth in 2025 after contractions in prior years, but recovery remains modest and faces headwinds like weak exports, structural challenges in manufacturing, high energy costs (though easing), and uncertainty from global trade tensions.
GDP Growth: 2025 full year: +0.2% (real, price-adjusted; slight rebound after two years of contraction). Q4 2025: +0.3% quarter-on-quarter; seasonally and calendar-adjusted; better than some expectations. 2026 forecasts: Range from ~0.8% ifo Institute, cautious view) to 1.0% (Federal Government annual report), up to 1.2–1.5%.
Growth is expected to be driven by public investment (infrastructure, defense), fiscal stimulus, real wage gains boosting consumption, and more working days in 2026, though offset by trade pressures and subdued private investment early on.
Inflation (CPI/HICP): December 2025: 1.8% year-on-year (below ECB’s 2% target for the first time since late 2024, aided by lower energy/food prices). January 2026: +2.1% year-on-year (provisional; slight uptick, edging back above 2%).
Unemployment rate: ~6.3% seasonally adjusted; up from prior lows, with unemployment surpassing 3 million people — a 12-year high in unadjusted terms at 6.6%. Expected to stabilize or slightly decline in 2026 3.5–6.3% range across sources, depending on harmonized vs. national measures, supported by public sector/job creation but pressured by industrial losses.
Industrial production: Sharp -1.9% month-on-month in December 2025; worse than expected; annual -0.6%, highlighting ongoing manufacturing weakness despite some Q4 stabilization. Exports declined in late 2025 but showed +4.0% month-on-month in December, volatile due to global demand and tariffs.
Strong surplus expected to persist ~4–5% of GDP in recent years/forecasts, though moderating. Government debts is rising; deficit ~3–4% of GDP projected; debt to ~65% in 2026 per EC forecasts, driven by expansionary policy. Conference Board LEI rose modestly in late 2025, signaling possible gradual improvement into 2026.
Germany’s economy is transitioning toward modest recovery in 2026, ending years of stagnation largely thanks to fiscal support and domestic demand. However, structural issues limit upside potential. The Bundesbank notes early 2026 growth likely remains “slow lane,” with full momentum possibly delayed.
This aligns with Mercedes CEO Ola Källenius’s recent warnings about eroding productivity and the need for more work and reforms.