Germany news: Shadow economy grows to over $500B

The German government is planning to push ahead with opening tenders for new power plants.

Economy Minister Katherina Reiche announced that tenders would be put out for the building of power plants with a total of 12 gigawatts this year, with further bids being called for in 2027 and 2028.

Reiche was speaking at the Handelsblatt Energy Summit 2026 in Berlin on Tuesday.

She said the first wave of new power plants would be mostly gas-powered.

"We need these because gas power plants are the perfect complement to renewable energy," she said, citing the 40 days in 2025 when energy production from renewables was below 20%, at which point non-renewables become necessary.

The plans for tendering new plants have been around for a while, but the previous government did not issue the tenders.

Germany has set itself the target of becoming carbon neutral by 2045.

The federal government pledged on Tuesday to introduce major reforms aimed at cutting down rules and regulations around claiming benefits.

Berlin hopes to consolidate various agencies that oversee the social welfare system, and streamline the application process by moving more of it online.

"The welfare state of tomorrow will be simpler, fairer and more digital," Labour Minister Bärbel Bas said at the unveiling of a report produced by a government-appointed commission. "Less paperwork, simpler applications, faster decisions."

Bas, a member of the Social Democrats (SPD), emphasized that the reforms did not mean that benefits would be cut as some members of the CDU, the center-right party of Chancellor Friedrich Merz, would like to see.

There would still be savings from the increased efficiency, Bas said.

Chancellor  Merz welcomed the announced reforms, saying they "really involve a fundamental structural reform of the social security systems."

Germany's railway company Deutsche Bahn plans to cut €500 million ($595 million) per year in management costs, company head Evelyn Palla said.

According to Palla, the railway operation will focus on improving its service while "saying goodbye to everything else, because we simply can't afford it anymore."

The cuts will include some 30% of the company's 3,500 management positions.

Deutsche Bahn has become infamous in Germany for its unreliable trains, overshadowed by similar services in Austria and Switzerland.

Workers walked out on strike at several university hospitals across Germany on Tuesday over a wage dispute.

The Verdi trade union said 22 hospitals had been affected, although emergency and vital treatments had not been disrupted.

Some 300 employees, including nurses and lab technicians, walked out at Jena University Hospital, in the eastern state of Thuringia.

The unions are calling for a 7% wage increase of at least €300 ($358). Employers have refused but have failed to put forward an alternative, according to the unions.

Further strikes, including employees from universities and research institutions, are set for Wednesday, with more warning strikes possible until the next round of negotiations on February 11 to 13.

The mayor of the rural municipality of Schonungen in central Germany, Stefan Rottmann, narrowly avoided upsetting a happy couple over the weekend, with the help of Detlef Nicklaus in a local snowplow. 

"I have married hundreds of couples in the past years — I was always punctual and the bride and groom always said 'I do' in the end," Rottmann wrote on Instragram. "Today, our winter road service quite literally cleared a path for Nico and Alisha's marriage." 

"My colleague Detlef Nicklaus picked me up at the last second in a clearing vehicle, because my own car was stuck fast. With three minutes' delay, and a nice souvenir photo of the couple, myself as mayor and Detlef at the wheel of the snowplow, we carried on to the ceremony." 

Schonungen is a rural community comprised of several villages in the very north of Bavaria, located in a hilly and forested area prone to heavy snows in winter.

 

Switzerland's national railway operator SBB said it had broken its previous punctuality record, with 94.1% arriving on time in 2025, besting the 93.2% record it achieved in 2024.

The SBB managed to reach this level of punctuality despite hosting several international events such as Eurovision and the UEFA Women's Euro 2025, which put an extra strain on the rail network.

In contrast, German trains run by Deutsche Bahn (DB) had an on-time rate of around 60% in 2025. It is also worth noting that SBB counts any trains that overshoot their arrival time by 3 minutes as delayed, while DB is more generous, allowing trains to be 6 minutes late before labeling them as such.

The unreliability of the German train operator has also caused problems for the Swiss network. In some case, SBB has also turned back German trains at the border when too delayed and put on their own replacement services.

"In particular, trains from Germany arrive in Switzerland with delays, and this has an effect on punctuality in our country," SBB said.

German companies increased their investments in China in 2025, reaching the highest level in four years.

New data from the IW German Economic Institute, published by the Reuters news agency, shows investments rose by 55.5% from €4.5 billion ($5.4 billion) in 2024 to over €7 billion in 2025.

This increase reflects how recent US trade policies, including tariffs on European products, have encouraged companies to strengthen business ties outside the US.

Several businesses are boosting production and supply networks in China to protect themselves from political tensions with Washington.

"Many companies say: 'If I'm only producing in China for China, I'm reducing my risk of being affected by possible tariffs and export restrictions'," said Jürgen Matthes, head of international economic policy at the IW institute.

Large German companies such as Volkswagen, BASF and Mercedes-Benz continue to rely on the Chinese market, where they sell most of their products.

Volkswagen said both the Chinese and US markets were of great strategic importance, with investments being made "independently of one another." They also said that technologies and products developed in China are now being used on a larger scale in Southeast Asia, the Middle East, South America and Africa. 

A new study has shined a light on sexual abuse cases involving hundreds of children and young people in the German arm of the Scouts and Girl Guides operated by Christian churches.

The study was presented by the Association of Christian Scouts and Guides (VCP) in Kassel. The organization recorded 344 victims of abuse and 161 suspected perpetrators between 1973 and 2024.

Johanna Hess, from the Dissens Institute for Education and Research, said two-thirds of the victims were between 13 and 17 and 60% were female.

The perpetrators, on the other hand, were almost entirely male but also relatively young, with half being aged between 18 and 24. Only three of the suspected abusers were female. More than a third of the abuse cases involved rape, according to the researchers.

The discoveries come as the culmination of a probe launched in 2023 by the VCP and the Munich-based research institute IPP. The researchers reviewed some 1,300 case files and carried out interviews with 79 former and active VCP members.

The VCP currently has around 47,000 members in Germany.

The German economy grew by 0.2% in 2025, following two years of no growth. In 2026, growth is expected to hit 1%.

Talking to the Handelsblatt newspaper, German Economy Minister Katherina Reiche said the limited growth was unsustainable. Reiche attributed it to government spending based on debt, while also saying Germany needed to become more productive.

The German economy has been hit particularly hard by the global trade unrest, kicked off by US President Donald Trump, which has led to a decrease in exports.

Reiche, who is from the center-right Christian Democrats (CDU), said the only solution was to introduce structural reforms in taxes, social security systems, the labor market and energy prices. She added that the debt taken on by the government would only be warranted if such reforms paid off.

The Auschwitz-Birkenau camp was liberated from the Nazis by Soviet forces 81 years ago.

Commemorations are being held across Europe, with camp survivor Tatiana Bucci addressing MEPs in the European Parliament on Tuesday.

The German Bundestag is set to hold its own commemoration on Wednesday.

Follow DW's Holocaust Remembrance Day blog for the latest.

Many young people in Germany are working below their qualification level, and the problem affects certain groups more than others.

According to recent data from the Federal Statistics Office (Destatis), around 15% of workers under the age of 35 say they have a higher education qualification than their current job requires.

Women and people with a migration background are particularly impacted. Young women report overqualification more often than men, 16% to 13% respectively.

Young workers with a migration background are both more likely to be overqualified (18%) and underqualified (12%) compared to their peers, 7% of whom were underqualified. 

Experts argue that this is not just an individual issue, but a structural one. Employers are failing to fully use the skills of young women and migrants, despite ongoing labour shortages, Bettina Kohlrausch, head of the Institute of Economic and Social Research (WSI), said.

Kohlrausch pointed to discrimination in hiring processes as a key factor. Addressing these issues could be a more effective response to skills shortages than cutting back on part-time work.

The minister for refugees, among other issues, in the western state of North Rhine-Westphalia (NRW), Josefine Paul, has announced her resignation. 

Paul said she was quitting because of the "increasing polarization in the investigative committee" in parliament looking into the knife attack by a Syrian asylum seeker in Solingen in August 2024. 

The Green party member had faced criticism for sluggish and incomplete public communication, among other things, from opposition in the state parliament. 

Three people were killed and several more severely wounded in the August 23 knife attack. Authorities faced criticism as it came to light that the suspect was a 26-year-old Syrian asylum seeker who had been ordered to leave the country but had not been expelled to Bulgaria. The case also prompteda nationwide debate on migration and asylum policies.

"Today I am aware that an earlier communication after the weekend of the attack would have been better," Paul said in a statement on Tuesday. "Even if at this point there was no complete picture of the asylum law aspect." 

The 43-year-old said that the focus on her and her actions risked overshadowing the real goal of a "careful and unbiased investigation in the interests of the victims of the Solingen terrorist attack and their relatives and those left behind." 

Paul rejected allegations of having obstructed transparency in the investigation, saying these were inaccurate. The long-running probe of the case in NRW's state parliament began in November 2024.

A cargo ship carrying 1,294 vehicles, including 477 electric cars, from Germany to the UK caught fire off the German North Sea island of Borkum, late on Monday.

Central Command for Maritime Emergencies (CCME) said on Tuesday that the nearly 150 meter-long (492 foot-long) MS Thames Highway was sailing from the German port of Emden to the British city of Grimsby.

CCME said a fire broke out in the engine room late Monday evening. Crew members managed to seal the compartment, preventing the fire from spreading further. 

The fire was extinguished after two teams of firefighters arrived at the scene by helicopter around midnight. 

There were 18 crew members and a captain on board and no injuries have been reported.

The vessel is currently anchored outside the Ems estuary, north west of Borkum, as efforts to restart the engine continue.

If this is not possible, the ship will be towed back to Emden.

Meanwhile, rescue vessels and helicopters are on standby in the nearby vicinity of the MS Thames Highway, should they be needed.

The German Football Association (DFB) has broken its silence on the matter of a potential boycott of the World Cup, to be hosted by the United States this summer, with a few games also to be played in Mexico and Canada.

Read DW's full report on how the German FA responded to the calls for a boycott.

German Vice Chancellor and Finance Minister Lars Klingbeil has praised a new trade deal between the European Union and India that was signed on Tuesday.

"This agreement creates new opportunities for growth and good jobs — in Europe and India alike — while deepening the strategic partnership with the world's largest democracy," Klingbeil said.

The vice chancellor described the deal as opening "a new chapter in European trade policy."

"At a time of upheaval, we are consciously focusing on openness, reliability, and strong partnerships."

For the latest updates on the deal, read our live blog on the EU-India free trade agreement.