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Germany news: Economic slowdown expected in 2nd quarter

The German government expects the economy to take a significant hit from the fallout of the Iran war. Even if the conflict were to end, it said the impact on energy prices will likely be felt for some time. DW has more. Below is a roundup of news headlines from Germany on Friday, May 15, 2026:    The Frankfurt Main Customs Office seized nearly 30,000 rare plants and animals, or products made from them, last year, according to the agency's annual report released Friday. The office, which oversees Frankfurt Airport, said the items ranged from live iguanas and tortoises to a wolf fur coat, creams made from snake venom and corals.  The report said the items were found in intercepted cargo and mail shipments, as well as in passengers' luggage. Customs officials also seized nearly 15,000 kilograms (33,000 pounds) of drugs with a street value of around €190 million ($220 million). The report said 88 suspected drug smugglers were apprehended at the airport, one of whom had swallowed 760 grams of cocaine packed into small capsules. Officials also discovered almost half a million counterfeit items and 755,000 illegally imported medications, such as erectile dysfunction drugs and hair growth products, that had been primarily shipped by mail.    Germany's domestic intelligence agency has decided to end its surveillance of Scientology, citing the organization's declining relevance. Scientology was founded in the US in the 1950s by science fiction writer L. Ron Hubbard. The first branch was set up in Germany in 1970 and it had been monitored by the domestic intelligence agency since 1997. The agency said that while that comprehensive surveillance would be discontinued, it would still continue monitoring anti-constitutional activities by individual members. Scientology describes itself as a church, but it has been accused of threatening democracy and operating like a cult.  Scientology maintains a number of branches in Germany, including in Berlin, Düsseldorf, Frankfurt, Hamburg, Hanover, Munich, and Stuttgart. According to the domestic intelligence agency, it had about 3,600 members in 2024, a number that has not changed since 2021. German Chancellor Friedrich Merz said he and US President Donald Trump  were in agreement that Iran must come to the negotiating table now and that the Strait of Hormuz must remain open. "I had a good phone call with @POTUS Donald Trump on his way back from China," Merz wrote on X, adding that they agreed "the US and Germany are strong partners in a strong NATO." He said they had also agreed that Tehran must not be allowed to possess nuclear weapons. The comments come amid strained relations between the US and Germany following a recent spat between the two leaders. Merz last month said Iran had "humiliated" the US , prompting Trump to criticize the German leader. The US also subsequently announced it would withdraw 5,000 American troops from bases in Germany. Meanwhile, Merz said on Friday at a German Catholic event that he wouldn't send his kids to the US to work or study due to the current "social climate," a remark that drew applause from the audience. German Chancellor Friedrich Merz says he wouldn't advise his own children or other young Germans to move to the US for study or work. Speaking at the German Catholic Convention in Würzburg, he referred to "the social climate that has suddenly developed" in the United States and said that "even the best educated in America have great difficulty in finding a job." "I am a great admirer of America, but right now my admiration is not increasing," he said, to laughter from the 1,600-strong audience — many of them young people. "I wouldn't recommend to my children today that they go to the US, get an education there, and work there." To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video This was Merz's first appearance at the Catholic Convention since he took office in 2025. Seated alongside the 70-year-old Chancellor were 19-year-old student Amy Kirchhoff from Saxony and 29-year-old Lisa Quarch from the Federation of German Catholic Youth. For just over an hour, the discussion touched on many domestic German issues: anxieties about the future, educational opportunities, and youth centers that have been hollowed out by budget cuts. The remark regarding the US is one of those signature personal statements from Merz — the kind that has the potential not only to make the German television news but also to be picked up on the other side of the Atlantic. The comments come after a public spat between Merz and US President Donald Trump after the chancellor said Iran was "humiliating" Washington. That prompted an angry response from Trump, who said Merz was doing a "terrible" job as leader and subsequently announced the withdrawal of 5,000 American troops from Germany . The head of Commerzbank says  artificial intelligence is expected to account for a large share of the roughly 3,000 job cuts planned by the lender. Germany's second-largest listed bank is seeking to fend off a takeover by Italy's UniCredit and has announced layoffs alongside ambitious profit and return targets through 2030. "AI is very powerful in various areas," chief executive Bettina Orlopp told German news agency dpa on Friday, adding that the impact of the technology had improved over the past year. She stressed that Commerzbank aimed to protect its core workforce as much as possible, with cuts focused on external call center capacity and outside IT contractors. "Given the demographics within our bank, we will make this process as socially responsible as possible," she said. German Chancellor Friedrich Merz has acknowledged that his government could do better to communicate with the public and deliver results. The ruling coalition, made up of Merz's conservative Christian Democratic Union / Christian Social Union and the center-left Social Democrats , has struggled to find common ground on key issues such as pension and labor market reforms, and how to shield consumers from the impact of the Iran war .  "Dispute is part of democracy," Merz told an audience at the German Catholic Convention in the southern city of Würzburg. "But the dispute needs to lead to results. And maybe we are currently fighting a bit too much and are not delivering enough results. That may be possible."  Only 13% of Germans are satisfied with the federal government, according to a recent poll, while Merz's approval rating stands at just 16%. At the same time, the far right Alternative for Germany (AfD) is gaining in popularity. Merz said it was important to find solutions in the political center to the challenges facing Germany and admitted that he needed to work on his communication skills to convince people it was possible. "I know that I need to improve my communication so that this message is better understood," he said. Following reports of a  dead whale off the Danish island of Anholt , the environment minister of the German state of  Mecklenburg-Western Pomerania says it's unclear if it is the same mammal that spent weeks languishing off Germany's northern coast. "As soon as we have confirmed information on the matter, we will inform the public immediately," State Environment Minister Till Backhaus said Friday. Danish media reported late Thursday that a suspected humpback whale carcass had been spotted about 75 meters (245 feet) from Anholt's shore.  The reports said authorities had no plans to recover the whale. In late March, a humpback whale — dubbed Timmy by the German press — became stranded off Germany's Baltic Sea coast . The marine mammal spent weeks stuck in Wismar Bay, where its health deteriorated. A rescue effort led to the animal being moved into the Skagerrak strait in the North Sea and released in early May. Backhaus cautioned against speculation and said the goal was now "to determine whether the dead whale is the same animal that had previously stranded multiple times in Wismar Bay." He said he was in close contact with the Federal Environment Ministry and the Danish Environmental Protection Agency. "However, due to Anholt’s transportation situation, we do not expect quick results," Backhaus added. The German government says it expects the economy to suffer a significant slowdown in the second quarter as a result of the Iran war.  The prediction comes less than a month after the government halved its economic growth forecast to 0.5% for the whole year. "Rising prices, supply ⁠chain ​issues ​and uncertainty are weighing ​on sentiment ‌among businesses and ​households," ⁠the Ministry for Economic Affairs said in its ⁠monthly ​report. It said further economic development will depend on how long the conflict in the Middle East lasts and how long trade routes and production capacities remain impaired. "But even after the situation eases, the consequences for energy and raw materials prices and supply chains are likely to remain noticeable for longer," it said. Europe's largest economy had a stronger-than-expected start to the year, with GDP growing 0.3% in the first quarter compared with the previous quarter. High energy costs have also caused Germany's energy-intensive industries to scale back production and cut tens of thousands of jobs, according to the Federal Statistical Office. Since February 2022, production fell by 15.2% in the chemicals, paper, glass, and metal manufacturing sectors. The number of workers dropped by 53,300, or 6.3%. The decline in production was most pronounced among manufacturers of concrete, cement, and sand-lime brick products, the statistics office said. One exception was petroleum processing: it increased its production by 24.6% and created 1,000 new jobs.  To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Meanwhile, sentiment in Germany's housing construction sector dropped in April to its lowest level in four years. The Munich-based Ifo Institute's business climate index for the sector plummeted from minus 19.3 points in March to minus 28.4 points last month.  "Geopolitical uncertainty is ‌now also weighing on residential ‌construction ​in Germany," the Ifo's Klaus Wohlrabe said. "With fragile supply chains ​and rising financing costs, several risks are hitting the construction sector ⁠simultaneously." To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Guten Tag from the DW newsroom in Bonn. The German government is warning that the impacts of the Iran war will likely cause a significant economic slowdown in the second quarter. The Ministry for Economic Affairs said the conflict is driving up prices for energy and raw materials, creating uncertainty for businesses and households. The rising prices are also causing mass layoffs and a decline in production in Germany's energy-intensive industrial sectors, according to new figures from the Federal Statistical Office. And a survey by the Munich-based Ifo Institute has found that sentiment in German housing construction has plummeted to its lowest level in four years. Meanwhile, reports of a dead whale off the coast of Denmark have led to questions about the fate of a humpback — dubbed Timmy — that spent weeks languishing off Germany's Baltic coast.  Stick with us for these and other stories from across Germany.