Germany and France face economic challenges as trade tensions with the U.S. loom

Germany and France are facing economic challenges as they prepare for potential trade tensions with the U.S. under President-elect Donald Trump. Germany is experiencing its second year of zero growth, while France's growth is projected to be under 1% in 2025. France's budget deficit has reached 6% of GDP, and its debt-to-GDP ratio has increased to 112%. The European Central Bank has warned that France's fiscal path is unsustainable without significant reforms. Germany, with a lower debt-to-GDP ratio of 63%, has room for investment but needs to address its rigid fiscal policies and implement reforms to boost growth. Political instability in Germany, including the recent firing of the finance minister, adds to the uncertainty. The country is also struggling with energy supply issues and a lagging automotive sector. While other European economies may perform better, they cannot fully compensate for the weaknesses of Germany and France.