Recession looms as Iran blocks growth

Germany’s new tank brigade in Lithuania has conducted its first combat exercises in the Baltic state.

Commander Christoph Huber said the exercise in Pabarade is an important step towards war preparation.

Huber said the unit is learning from developments in Ukraine and should be prepared for future conflict scenarios, not just past wars.

Germany established the brigade in response to the growing threat from Russia. The unit is expected to reach its full strength of approximately 4,800 soldiers and 200 civilian employees by 2027. Lithuania borders Russia’s ally Belarus and the Russian region of Kaliningrad.

About 2,900 troops and 800 vehicles from eight NATO countries are taking part in the exercises at the Pabrade training ground, about 15 kilometers from the Belarusian border.

The Bundeswehr also deployed more than 300 drones as part of the exercises, which reflect lessons from modern warfare.

Germany’s International Aerospace Exhibition (ILA) air show opened in Berlin on Wednesday.

This year’s show has been impacted by the recent cancellation of a Franco-German fighter jet project.

German Chancellor Friedrich Merz and French President Emmanuel Macron said manufacturers Dassault and Airbus had failed to resolve key disputes.

The Future Combat Air System (FCAS) program, launched in 2017, aimed to create a next-generation fighter aircraft to replace the Eurofighters and Rafale around 2040. It would have been one of Europe’s largest defense projects.

The failure of the project is a blow to European security cooperation efforts and highlights the difficulties the continent faces in coordinating military and defense initiatives.

It also comes as Europe looks to boost its defense capabilities amid the threat from Russia, strained US-NATO relations and the ongoing war in the Middle East.

At the ILA on Wednesday, Merz said German and French defense ministers would outline a revamped cooperation project between the two neighbors on air defense data networks by July.

“Our defense ministers will now work on how this can be implemented before the next Franco-German intergovernmental meeting in Germany, which we will hold in July,” Merz said at the Berlin Air Show.

The pledge to focus on the “combat cloud” – data networks between warplanes and related software – comes after the flagship FCAS project was abandoned this week.

Eight companies led by Airbus are set to unveil a new plan for a next-generation European fighter jet at the ILA on Thursday to replace FCAS, according to AFP news agency.

A court order allowing police surveillance of the German suspect in the Madeleine McCann case has not been extended.

Police in the northern city of Kiel said on Wednesday they had appealed the verdict, with the decision still pending.

A spokeswoman said Christian B’s vigil would remain in effect until midnight on July 12. Extension beyond that date was rejected, although no reason was given.

B. One suspect remains in the case of Madeleine McCann, a British girl also known as “Maddie” who disappeared in 2007 at the age of 3 while on vacation with her family in Portugal. Her disappearance sparked a global search and is still unsolved.

Other court measures remain in place, including electronic monitoring, requiring him to wear an ankle tag to track his movements. Police declined to provide details of the surveillance for operational reasons.

The suspect, who has multiple previous convictions for sex crimes including rape, was released from prison in Lower Saxony in September after serving seven years. This sentence was unrelated to the McCann case.

He is currently living in municipal housing in Kiel.

Eight German states have warned that planned health reforms could harm university hospitals.

Ministers from Baden-Württemberg, Berlin, Brandenburg, Hesse, Mecklenburg-Western Pomerania, Lower Saxony, Saxony-Anhalt and Schleswig-Holstein said the draft law could weaken the financial basis of key parts of the health system.

A bill to freeze public health insurance is set to have a first reading in Parliament on Friday. It aims to bridge the funding gap with spending cuts and stricter rules for insurers.

Mecklenburg-Western Pomerania’s science minister, Bettina Martin, said limiting payments would leave hospitals starved of money even as costs rise. They warned they may have to cut services or delay care, which would put a strain on patients.

The goal should be stable funding and strengthened care, not additional pressures, the states said. He called for changes in hospital funding, less bureaucracy and more support from tax money.

Police in Hamburg say three children were injured in a traffic accident outside a school in the city’s prosperous Blankenese district.

According to police, a car driven by a 75-year-old woman hit the children while parking.

Police said two children, ages 7 and 10, were taken to the hospital for further treatment. A child’s arm was broken. A third child, also aged 10, was treated at the scene and released into the care of his father.

The woman had taken a child to school. Police said they are investigating whether he might have mistaken the accelerator for the brake pedal.

German Chancellor Friedrich Merz is set to follow Germany’s World Cup opening match from home, expecting a “clear victory” against debutants Curacao.

According to the Funke media group, a government spokesman said he would watch Sunday’s match “with great passion, like millions of football fans in the country.”

While Merz plans to follow the tournament on TV, government Minister of State for Sports Christian Schenderlein plans to attend Germany’s second group game against Ivory Coast in Toronto on June 20.

German authorities are cracking down on a suspected international drug trafficking network in a coordinated raid.

Investigators led by the Federal Criminal Police Office (BKA) conducted searches in the states of North Rhine-Westphalia and Hesse and arrested one of the main suspects. An operation also took place simultaneously in Bulgaria.

Prosecutors said the arrested man is suspected of armed cannabis trafficking and large-scale commercial drug dealing.

In Varna officers from the BKA, police, tax investigators and prosecutors seized extensive evidence, a firearm, €20,000 ($23.75) and a large quantity of illegal drugs.

The suspects, aged 26 to 63, are believed to have run a network of companies to smuggle drugs from South America and Thailand into Germany, authorities said.

Investigators are stepping up efforts against cross-border drug networks.

Germany faces fears of a recession as energy price shocks caused by Iran weigh on growth.

Economists at DIW Berlin say output is likely to be slightly lower in the spring and summer quarters.

A contraction in two consecutive quarters would meet the definition of a technical recession. The economy is expected to stabilize by the end of the year with the support of government spending.

DIW chief economist Geraldine Denny-Nedlick said any growth this year would be driven entirely by the public sector. The institute now forecasts growth of 0.5% for 2026 and 0.8% for 2027.

This marks a decline from March, when the DIW had expected growth of 1.0% this year and 1.4% next year. Danny-Nedlik said the energy shock was slowing the recovery “significantly”, but added that it could not be compared to the crisis of 2022-23.

“The shock is small, energy supplies are still secure and Germany is now less dependent on fossil fuel imports than after the start of the Ukraine war,” he said.

Higher defense spending and delayed investments from government funds for infrastructure and climate neutrality are expected to provide limited support. Private consumption is only slowly recovering, while export-driven industry remains weak amid structural challenges and global uncertainty.

In the negative scenario, the economy could shrink by about 0.5% in 2026.

Germany’s economy has been facing a number of shocks in recent years, from the war in Ukraine to supply chain shocks.

good day From the DW newsroom in Bonn, where we’re learning to live with the closure of a busy bridge over the Rhine River after engineers found serious structural problems.

The Friedrich-Ebert Bridge typically carries over 100,000 vehicles a day and is one of the most important Rhine crossings in the region.

The closure has caused major disruption to passengers and freight traffic, but has provided a nearby ferry company with an unexpected surge of new business.

Meanwhile, there are fears that Germany is facing a technological recession as Iran’s influence begins to wane.

Stay tuned for the news Germany is talking about today.