Merz issues business SOS in letter to allies – DW – 01/06/2026

Highlights from Chancellor Friedrich Merz’s letter to coalition parliamentarians at the start of 2026, dated Sunday, have found their way into German media on Tuesday.

Most lead with his stark warnings on the business climate in the country. 

“The situation of German industry is very critical in some branches,” Merz warned in the letter.

“Industry giants as well as considerable numbers of mid-sized and small businesses are facing major challenges, in many companies jobs are being lost.” 

The warning follows a year punctuated by stagnant economic growth, major job losses in key industries like carmaking, and bankruptcy rates unseen in Germany in years. 

Merz wrote that as a result of this, the coalition will “have to concentrate on making the right political and legal decisions to drastically improve the economic conditions.”

Merz wrote that it had become clear that productivity in Germany was “no longer good enough” amid “changed global economic conditions.”

“Labor costs, energy costs, bureaucratic hurdles and tax burdens are all too high,” he said. “We will need to work on this together.” 

The chancellor’s appeal might be aimed in particular at his center left allies, the Social Democrats, which tend to have slightly different economic priorities to Merz’s Christian Democrats.

The coalition spent the back end of 2025 struggling or indeed failing to agree on some core economic policy reforms. 

Heating and electricity supply remained patchy in parts of southwestern Berlin on Tuesday, the fourth day following a sabotage of high-voltage cables leading to a power station in what authorities in the capital believe was a fire set by left-wing militants. 

Around 45,000 households and 2,200 businesses were initially cut off in the Saturday morning attack on the cables, which was claimed by a left-wing extremist group. 

According to the Stromnetz Berlin operator, around 19,500 households and 1,000 businesses are back online, but it may take until Thursday to get everyone back on the grid. 

Key facilities like hospitals, which briefly had to rely on generators for power, are back online, while 72 of 74 affected care homes are also being supplied again, Stromnetz Berlin said. 

Temperatures in Berlin, no stranger to harsh winters, have been at or below freezing more or less consistently since Saturday’s sabotage. 

Hello and welcome to our German news updates for January 6, 2026. 

Much of the country, from north to south and east to west, awoke to at least a smattering of snow and temperatures around freezing point on Tuesday. 

It might be ideal weather for the Siberian mountain goats at the Berlin Zoological Gardens, but for city authorities and thousands of residents facing a fourth day of power outages after sabotage, conditions could be better. 

Meanwhile, Chancellor Friedrich Merz’s start-of-year letter to politicians in his coalition is doing the rounds in the media, and leads with a stark warning on the state of some core businesses in the country. 

And in Brandenburg, the state coalition government is unraveling.

This is a byproduct of the disintegration of the far-left Sahra Wagenkencht Alliance (BSW) party, that’s already looking rather less relevant now than it did when the state last voted in September 2024.

Stick around for more on these stories, new inflation figures expected early in the afternoon, and anything else of interest developing in Germany in the course of the day.