Germany confronts economic challenges as new chancellor prepares to take office

Germany is facing significant economic challenges as it prepares for a new chancellor, likely Friedrich Merz. The country is grappling with a shrinking economy, high inflation, and an aging population, leading to a looming pensions crisis. The new leadership will need to address public spending and debt rules, which have been a cornerstone of German fiscal policy. Merz may consider relaxing these rules to invest in the economy, but this could provoke political backlash. Germany's public debt stands at about 62.4% of GDP, significantly lower than France's 113.7%. However, the shift in fiscal policy could lead Germany to resemble France, raising concerns about future economic stability.