Skip next section What you need to know
What you need to know
- Chancellor Friedrich Merz‘s conservatives are pressing their coalition partners to deliver promised pension and labor market reforms
- Merz’s Christian Democrats could hold up a Social Democrat-backed tax reform, fueling fears of a coalition collapse
- IG Metall accuses Volkswagen of ‘disrespectful’ handling of its decision to scrap key labor agreements
- The clash comes as VW plans an extra 50,000 job cuts worldwide, with several German plants facing an uncertain future
Here is a roundup of top stories from and about Germany on Friday, October 2, 2026:
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Skip next section German recovery still on shaky ground, trade group warns10/02/2026October 2, 2026
German recovery still on shaky ground, trade group warns
Germany’s emerging economic recovery remains fragile despite an improving outlook, the country’s foreign trade association BGA has warned.
A BGA survey found companies reporting improved business conditions after diversifying supply and distribution routes and adapting to recent crises. However, many firms said red tape was hampering their operations.
“Companies can see light at the end of the tunnel again, but they are still driving with the handbrake on,” BGA President Dirk Jandura said.
Leading German economic institutes have raised their growth forecast for this year to 1.3%, up from 0.6% in their spring forecast. The government is also expected to raise its forecast next week.
Debt-financed government spending on infrastructure and defense is a major driver of the expected growth.
Jandura said bureaucracy remained a significant drag, with 82% of companies surveyed naming it as one of the biggest obstacles to competitiveness and 78% saying they had yet to notice any reduction in red tape.
The improvement has also yet to reach the labor market, according to BGA, with more companies in the sector planning to cut jobs than create them.
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https://p.dw.com/p/5Ndz0Skip next section German university graduates rise 3%10/02/2026October 2, 2026
German university graduates rise 3%
The number of students and doctoral candidates graduating from German universities has risen by 3%, according to the Federal Statistical Office.
Some 527,600 people completed a degree in 2025, an increase of 16,000 from the previous year. Women accounted for 53% of graduates, unchanged from 2024.
Almost half of all qualifications were bachelor’s degrees, with their number rising 4% to 256,000. Master’s degrees increased 1% to 150,800.
The number of master’s and state-exam qualifications allowing graduates to enter the teaching profession rose 6% to 32,400.
Law, economics and social sciences accounted for the largest share of qualifications at 41%, followed by engineering at 25%.
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https://p.dw.com/p/5NdPVSkip next section Union slams VW over scrapping labor agreements10/02/2026October 2, 2026
Union slams VW over scrapping labor agreements
Germany’s IG Metall union has sharply criticized Volkswagen over its latest cost-cutting drive, accusing management of provoking a conflict “that the company cannot afford.”
Thorsten Gröger, IG Metall’s regional head for Lower Saxony and Saxony-Anhalt, told public broadcaster Deutschlandfunk that VW’s approach was “disrespectful toward its own employees” and “irresponsible toward the company itself.”
Gröger said worker representatives had listened to a 50-minute presentation from management without hearing “a single word” about plans to terminate key collective bargaining agreements, while the media had already been informed.
He described the move as “unprecedented in the history of Volkswagen” and said employee representatives were prepared for the dispute.
VW says employment conditions need to be revised because of mounting cost pressures.
The carmaker plans to cut 50,000 jobs worldwide in the coming years, on top of previously announced reductions. Around half of the additional cuts could come in Germany.
The longer-term future of entire VW plants in Emden, Hannover and Zwickau, as well as Audi’s Neckarsulm site, also remains uncertain.
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https://p.dw.com/p/5Ncw1Skip next section German coalition infighting evokes Scholz-era collapse10/02/2026October 2, 2026
German coalition infighting evokes Scholz-era collapse
Germany’s conservative Christian Democratic Union (CDU) is stepping up pressure on its center-left Social Democratic Party (SPD) coalition partners ahead of talks next week on a series of contested economic and social reforms.
CDU General Secretary Franziska Hoppermann said Labor Minister Bärbel Bas, who is also an SPD co-leader, needed to produce legislation on pension reform “so that we can finally negotiate concretely.”
Her comments to the Frankfurter Allgemeine Zeitung (FAZ) newspaper come as Chancellor Friedrich Merz prepares to bring labor market reforms before the coalition committee next week. Merz said this week that Germany had “some catching up to do” when it came to making the labor market more flexible.
The Handelsblatt newspaper reported that CDU parliamentary leaders were considering withholding support for Finance Minister Lars Klingbeil’s income tax reform until Bas submits legislation on pensions and the labor market.
One government official described the increasingly fraught atmosphere as “real traffic-light vibes,” according to the Handelsblatt, a reference to the bitter disputes that preceded the collapse of former Chancellor Olaf Scholz’s three-party “traffic light coalition.”
The CDU argues that reforms agreed by the coalition in July were a package and that the SPD cannot expect its preferred measures to go ahead while delaying concessions it made on pensions and the labor market.
Among the most contentious plans is the proposed abolition of penalty-free early retirement after 45 years of contributions. The measure faces opposition within the SPD as well as from several CDU state premiers.
The coalition committee is due to meet next week as the government tries to resolve disputes not only over pensions and the labor market but also taxation, care funding and other reforms.
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https://p.dw.com/p/5Ncw4Skip next section Welcome to our coverage10/02/2026October 2, 2026
Welcome to our coverage
Guten Tag from DW’s newsroom in Bonn.
Things are getting increasingly tense inside Chancellor Friedrich Merz’s coalition.
The conservative Christian Democratic Union (CDU) is piling pressure on its center-left Social Democratic Party (SPD) partners to deliver on pension and labor market reforms agreed earlier this year. And the CDU appears ready to play hardball.
The gloves are also coming off at Volkswagen. Germany’s IG Metall union has accused VW management of provoking a conflict “that the company cannot afford.”
Stay with us here for these stories and more of what Germany is talking about today.
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