Germany in July 2026: the most important developments in economy
In July 2026, Germany's economy was dominated by the crisis at its carmakers, above all Volkswagen. On 9 July Volkswagen said it would halt production at four German plants, with factory closures planned from 2031. Reports put the cuts under consideration at up to 100,000 jobs and half of its model lineup. Chief executive Oliver Blume rejected plant closures as a cost-cutting measure, the supervisory board and the works council resisted the plans, and a dispute over board appointments delayed a nomination. On 24 July Volkswagen reported second-quarter earnings down by about a third and cut its sales and revenue forecasts. Weak demand in China and new US tariffs hit Volkswagen, BMW, Audi, Mercedes-Benz and Porsche. Audi lowered its sales outlook on 27 July, Mercedes cut its guidance, and by 29 July Porsche planned another 5,000 job cuts and BMW up to 8,000.
Banking and public finances formed the second theme. Deutsche Bank reported a record second-quarter profit on 29 July and announced a $569 million share buyback. Chancellor Friedrich Merz said he is not blocking UniCredit's bid for Commerzbank. Uber announced on 16 July that it will acquire Delivery Hero for about $14 billion. The government presented a plan to borrow €800 billion for rearmament, and a draft budget foresaw more than €203 billion in borrowing. Merz also proposed €10 billion in tax cuts. German bond yields reached a 15-year high on 23 July, the European Central Bank held rates with a rise expected in September, and corporate insolvencies reached their highest level in over two decades. The Ifo business index improved in July.
Energy was the third theme. Merz said Germany remains in an energy crisis after abandoning Russian gas and, on 21 July, thanked Azerbaijan for creating conditions to increase gas supplies. Brent crude reached $100 on 23 July, and low water on the Rhine tightened fuel supply. Renewables reached a record 58% of power consumption, and the government planned to cut renewable subsidies as solar output strained the grid. Elsewhere, Bayer spun off its US glyphosate business into a new company, Ruveon, Italo ordered 26 trains from Siemens for around 3 billion euros, and battery maker Varta filed for insolvency.
by WorldBrief & Maksim Micheliov | AI-generated summary
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