Germany news: Recession looms as Iran war chokes growth

Economists say Germany is edging toward recession as an energy shock caused by the Iran war takes a chunk out of growth. Meanwhile, police have carried out raids on a suspected international drug ring. DW has the latest.

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Cranes used to load containers on cargo ships are seen at the HHLA (Hamburger Hafen und Logistik AG) container terminal at the harbour of the northern German city of Hamburg
The Iran war is starting to hit businesses that were already dealing with tough conditionsImage: Joern Pollex/Getty Images

Skip next section What you need to know

What you need to know

  • Germany is facing a possible recession as the Iran war causes an energy shock
  • Two quarters of contraction would mark a technical recession
  • One main suspect has been arrested as authorities crack down on a suspected cross-border drug network
  • German Chancellor Friedrich Merz says he expects a “clear win” in Germany’s World Cup opener against Curacao

Here are the latest headlines from Germany on Wednesday, June 10:

Skip next section Three children injured in crash outside Hamburg school06/10/2026June 10, 2026

Three children injured in crash outside Hamburg school

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

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

Police said two children, aged 7 and 10, were taken to a hospital for further treatment. One of the children had suffered a broken arm. A third child, also 10 years old, was released into the care of his father after receiving treatment at the scene.

The woman had driven a child to the school. Police stated that they are investigating whether she might have confused the accelerator with the brake pedal.

https://p.dw.com/p/5F8mISkip next section Merz to watch Germany’s World Cup opener from home06/10/2026June 10, 2026

Merz to watch Germany’s World Cup opener from home

German Chancellor Friedrich Merz has been set to follow Germany’s World Cup opener from home, expecting a “clear win” against debutants Curacao.

A government spokesperson said he would watch Sunday’s match “like millions of football fans in the country, with plenty of passion,” according to the Funke media group.

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

https://p.dw.com/p/5F8BESkip next section Police target international drug network in raids06/10/2026June 10, 2026

Police target international drug network in raids

German authorities have been cracking down on a suspected international drug trafficking network in coordinated raids.

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

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

Officers from the BKA, police, tax investigators and prosecutors in Varna seized extensive evidence, a firearm, €20,000 ($23,75) and a significant quantity of illegal drugs.

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

Investigators have been stepping up efforts against cross-border drug networks.

https://p.dw.com/p/5F8MASkip next section Energy shock risks pushing Germany into recession06/10/2026June 10, 2026

Energy shock risks pushing Germany into recession

Germany is facing the possibility of a recession as an energy price shock triggered by the Iran war weighs on growth.

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

Two consecutive quarters of contraction would meet the definition of a technical recession. The economy is expected to stabilize toward year-end, supported by government spending.

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

That marks a downgrade from March, when DIW expected 1.0% growth this year and 1.4% next year. Dany-Knedlik said the energy shock was slowing the recovery “noticeably” but added it was not comparable to the crisis of 2022–23.

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

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

In a downside scenario, the economy could shrink by around 0.5% in 2026.

Germany’s economy has been navigating multiple shocks in recent years, from the war in Ukraine to supply chain shocks.

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https://p.dw.com/p/5F8AuSkip next section Welcome to our coverage06/10/2026June 10, 2026

Welcome to our coverage

Richard Connor | Natalie Muller Editor

Cars waiting for ferry at Mondorf, north of Bonn
Every cloud has a silver lining and Bonn’s Mondorf ferry has seen brisk business as a result of the bridge closureImage: Marc John/Bonn.digital/picture alliance

Guten Tag from the DW newsroom in Bonn, where we’re learning to live with the closure of a busy bridge across the Rhine River after engineers found serious structural problems.

The Friedrich-Ebert Bridge normally carries more than 100,000 vehicles a day and is one of the region’s most important Rhine crossings.

The closure has caused major disruption for commuters and freight traffic, but it has provided a nearby ferry company with an unexpected rush of new business.

Meanwhile, there are fears that Germany is facing a technical recession as the effects of the Iran war begin to bite.

Stay with us for more of the news that Germany is talking about today.

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