Germany news: Economy shows surprise growth despite Iran war

Germany's economy has grown more than expected, against a backdrop of rising energy costs and uncertain export markets.

Meanwhile, VW reports a sharp drop in profits, as pressures mount on the carmaker.

DW has more.

Here is a roundup of the top headlines from and about Germany on Thursday, April 30, 2026.

WATCH — Whale rescue hopes rise after weeks of doubt
Humpback whale "Timmy" is being transported from the Baltic Sea toward the North Sea after spending weeks in unsuitable, low-salinity waters.

Weighing 12 tons and measuring 12 meters, the whale needs saltier conditions to survive and feed.

While rescuers remain hopeful as his condition stabilizes, experts warn the animal is still seriously ill and may not survive.

If successful, Timmy could soon reach the Atlantic Ocean.

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German artist Georg Baselitz dies at 88
German artist Georg Baselitz has died at age 88, one of the galleries representing him announced in a post on Thursday.

Baselitz's body of work spans over six decades, with his art having international attention in the 1970s and 1980s when he began turning his figures upside down in paintings in a style known as inversion.

Rather than flipping paintings after they were finished, Baselitz would paint them inverted.

How Georg Baselitz became an artist
Georg Baselitz was born Hans-Georg Bruno Kern on January 23, 1938, in the Saxon village of Deutschbaselitz, a name he later adopted.

He spent his early childhood in Nazi Germany and then grew up in communist East Germany.

He initially studied art in East Berlin but moved to West Berlin in 1957.

But his break came in 1963, when authorities seized two of his paintings when he was exhibiting his artwork solo at a Berlin show.

Authorities seized his paintings, "The Big Night Down the Drain" and "The Naked Man" on obscenity grounds.

But the obscenity gave those paintings an essential vitality and the episode made him famous in Germany.

Several museum curators argued the paintings offered an unfiltered report of the damaged nature of postwar Germany as it struggled to find its footing once again.

Baselitz's public reputation, however, was somehow checkered.

His unflattering comments on female painters, including a widely reported claim that women "don't paint very ​well," garnered him wide criticism.

He was married to Johanna Elke Kretzschmar, known as Elke, with whom he had two sons.

Diesel and gasoline prices spike on day before temporary tax relief takes effect
Fuel filling stations in Germany applied a sharp increase to their prices on Thursday, a day before a new temporary relief on taxes on fuel comes into effect.

As of May 1, taxes on diesel and petrol or gasoline will be reduced, effectively, by just under €0.17 per liter.

At least for now, this is slated to stay in effect for two months, until the end of June.

But at midday on Thursday, the last time when filling stations were permitted to increase their prices, they put them up by more or less exactly the savings promised as of Friday.

According to the ADAC motorists' organization, which tracks fuel prices nationwide, the average diesel prices rose by 17.7 cents per liter, and the cheapest E10 gasoline prices by 15.4 cents per liter.

This put diesel at an average of €2.37 per liter, or roughly $10.52 per US gallon.

E10 unleaded stood at €2.26 per liter, or $10.03 per US gallon.

The sharp increases did also coincide with a large rise in oil prices around midnight on Thursday.

But by the time the midday surcharge was applied, oil prices were back to levels much more broadly comparable with those of the past few days.

A separate rule introduced amid the war in Iran limits German fuel stations to only making one price increase each day, at midday.

They then have flexibility to lower the figures as many times as they like in the 24 hours that follow before the next permitted window to hike their prices.

Trump criticizes German chancellor over Iran, Ukraine
US President Donald Trump has sharply criticized German Chancellor Friedrich Merz , accusing him of failing on Ukraine and interfering in efforts against Iran.

In a social media post, Trump said Merz should focus on ending the Russia-Ukraine war, claiming that the chancellor had been "totally ineffective" in doing so until now.

He also said Merz should concentrate on "fixing his broken country," especially on domestic issues like immigration and energy, rather than criticizing US actions on Iran.

The remarks come amid growing tensions between Washington and Berlin over the Iran war and broader security policy.

A public dispute between Trump and the German leader has been intensifying after the chancellor said the United States was being "humiliated" by Iran .

Trump hit back, saying Merz "doesn't know what he's talking about" and defending US military positioning and pressure on Iran.

He also said the US was reviewing a possible reduction of troops in Germany .

Mystery of coffin floating in river largely resolved
The mystery surrounding a coffin found floating in the Main River has largely been resolved, though one key detail remains unclear.

Police said the empty coffin had been placed near the river by grieving relatives, who used it in a symbolic farewell for a family member buried hundreds of kilometers away.

As we reported earlier, authorities had initially been alerted on Wednesday evening to the unusual sighting of a coffin in the water.

Firefighters recovered the fabric-lined coffin from the water before taking it to a police station.

Investigators later confirmed there had never been a body inside, but launched an appeal for the owners to come forward.

It later turned out that the grieving relatives had left the empty coffin by the water.

However, a police spokeswoman told DW it remains unclear how it ended up in the water.

Police said no crime is suspected.

German experts welcome ECB decision to leave interest rates unchanged
German financial experts have broadly welcomed a European Central Bank decision to leave interest rates unchanged .

Policymakers in Frankfurt were considering an increase as soaring oil prices from the Iran war push inflation in the eurozone higher.

A combination of slow growth and high inflation, or "stagflation," threatens to become a headache for the ECB, which left its benchmark interest rate unchanged at 2% on Thursday.

"The longer the war continues and the longer energy prices remain high, the stronger is the likely impact on broader inflation and the economy," ECB policymakers said.

Most analysts agreed that it was too early to raise interest rates, with an increase likely to stifle already floundering growth.

The CEO of the German Insurance Association (GDV), Jörg Asmussen, said it was understandable that the ECB had not acted.

"Given the uncertain duration of the Iran war and the depth of its economic impact, the ECB, like all central banks, is currently navigating in the fog," Asmussen said.

Lena Drager, a research director at the Kiel Institute for the World Economy, agreed but said the bank needed to be ready to swiftly raise interest rates if necessary.

"A preventive interest rate hike would be wrong now.

It would further burden the already weak economy without being able to directly combat the energy price shock.

The right answer is: wait and see, but with a clear response function."
Germany agrees to split heating costs in reform
Germany's coalition government has agreed to split key heating costs between landlords and tenants as part of a revised heating law.

The reform rolls back parts of the previous law introduced under former Economy Minister Robert Habeck , of the Green Party, which required new heating systems to run on at least 65% renewable energy.

Under the new plan, gas and oil heating systems can still be installed but must gradually use more climate-friendly fuels from 2029, including biomethane and synthetic alternatives.

If a heating system in an existing residential building is replaced and it runs on gas, heating oil, or liquefied petroleum gas, landlords will then have to cover half of the network charges, the carbon price, and the costs for biofuels.

"If a landlord chooses a new fossil fuel heating system, they must contribute to the ongoing heating costs" Federal Justice Minister Stefanie Hubig said.

How this small German village got dirt-cheap energy prices
Germany slips in press freedom ranking
Germany has slipped three places to rank 14 in the latest global press freedom index.

The watchdog Reporters Without Borders (RSF) said the drop reflected rising threats to journalists both online and on the streets.

The group also cited tougher working conditions linked to polarized coverage, including reporting on conflicts in the Middle East.

It still classifies Germany's media environment as "satisfactory."
RSF Managing Director Christian Mihr said Germany's decline reflects an increasingly heated climate, with journalists reporting coming pressure and intense public scrutiny, particularly when covering far-right groups or the war in Gaza.

The report found that, globally, press freedom was at a 25-year low.

Read more about the global press freedom index here .

Merz says Iran 'must come to the negotiating table' and stop 'playing for time'
German Chancellor Friedrich Merz called for an end to disruptions in the Strait of Hormuz and said that "if the relevant conditions are met, Germany stands ready to contribute militarily to guarantee the freedom of maritime routes."
Merz was speaking amid a visit to a military training ground in Münster in Lower Saxony on Thursday with Finance Minister Lars Klingbeil.

He said that he had lobbied at a European Council meeting in Cyprus to "increase the sanctions pressure on Iran, because if Hormuz remains blocked, that has massive economic consequences for all of us."
"Our message therefore: Iran must come to the negotiating table, it must stop playing for time, it can no longer take the entire region and even the entire world hostage," Merz said.

"The nuclear program of Iran must come to an end.

There can be no more strikes against Israel or our partners in the region."
Dressed in military camouflage gear with a "Merz" nametag, the chancellor said his government was in close contact on these matters with allies, "also and particularly in Washington."
"We are doing this in a collective transatlantic interest.

We are doing it with mutual respect and a fair division of labor.

And in this, we are following a clear compass, particularly in these turbulent times: this compass stays pointed to a strong NATO and a reliable transatlantic partnership," Merz said.

The chancellor has entered damage limitation mode in recent days after comments of his about the US being "humiliated" by Iran over the back-and-forth on negotiations in Pakistan elicited President Donald Trump's ire in a series of social media posts, including one where he mulled reducing the US military footprint in Germany .

For more of the latest from the crisis in the Middle East, follow our live updates .

Police seek to lift lid on puzzle of floating, empty coffin
Police in the German city of Hanau have been investigating after a coffin was spotted drifting in the Main River.

When officers received a report that a coffin was floating in the river, they initially thought it was a joke.

It wasn't until a second witness came forward that the officers responded, the broadcaster Hessischer Rundfunk reports.

Arriving at the banks of the Main between the Steinheim district and Mühlheim, officers confirmed the reports — a light brown wooden coffin was floating near the riverbank.

They pulled the relatively new-looking coffin from the water.

The most difficult part of the operation, however, was yet to come: The officers had to open the tightly closed coffin.

"That took some effort," a police spokesperson said.

When the lid eventually came loose, the coffin was revealed to be empty.

However, the box was lined with a classic white, silk fabric.

And the day’s date was written on the lid.

Police remain baffled and are asking the owner of the coffin, or witnesses who can say how it came to be in the water, to come forward.

Court says Weimer may not call bookshop 'extremist'
A Berlin court has ruled Commissioner for Culture and the Media Wolfram Weimer may not label a local bookstore's operators as extremists.

The case centers on the Berlin bookstore "Zur schwankenden Weltkugel" (The Wobbly Globe).

The dispute followed Weimer's decision to remove the shop and several other bookstores from a national prize shortlist, arguing public funds should not go to "political extremists."
The Administrative Court of Berlin ruled in an urgent decision that the extremism claim violated the women's personal rights and lacked a sufficient factual basis.

Despite inquiries from the court, Weimer failed to clarify what information had prompted him to submit a request to domestic intelligence officials regarding the bookstore.

Stubborn unemployment deepens labor agency deficit
Germany's stubbornly high unemployment figure is expected to weigh further on the country's Federal Employment Agency.

Agency chief Andrea Nahles said a new government forecast points to more jobless people this year, driving up spending on benefits.

In April, unemployment remained above three million at 3.008 million, with a seasonally adjusted rise of 20,000, although there was a reduction in unadjusted terms.

The agency had previously expected 2.9 million unemployed and a deficit of just under €4 billion ($4.67 billion) for 2026.

The updated outlook now sees an average of 2.978 million unemployed, increasing costs and pushing the deficit higher.

"This naturally increases costs.

Expenditure on unemployment benefits rises as a result, and consequently, so does our deficit," said Nahles.

The minister said the shortfall must now be fully covered by federal loans after reserves were exhausted last year.

"The situation has become more uncomfortable for us," she said.

Germany's Institute for Employment Research on Tuesday said it was more pessimistic about employment prospects in the country than at any time since the COVID-19 pandemic.

Trump threatens US troop cuts in Germany
US President Donald Trump says the US is considering a "possible reduction" of its forces in Germany just days after German Chancellor Friedrich Merz said the US was being "humiliated" by Iran's leadership.

Read more about Trump's threats to withdraw US troops from its bases in Germany .

Germany economy grows 0.3% in first quarter
Germany's economy expanded by 0.3% in the first quarter of 2026, continuing a faster-than-expected recovery.

Data from the Federal Statistics Office shows growth was driven by higher private and government spending, as well as rising exports.

Year-on-year, gross domestic product increased 0.5% in price-adjusted terms, and 0.3% adjusting for seasonal factors.

The expansion comes as higher costs — particularly at fuel pumps — take their toll, burdening consumers and businesses alike and driving down consumption and investment.

The US-Israeli war against Iran that began on February 28 saw Iran close the Strait of Hormuz in response, resulting in rising costs for energy.

Thursday's economic data covers January to the end of March.

Business sentiment has weakened with a key business index falling sharply in April, and economists have repeatedly downgraded their forecasts for the year.

Volkswagen profit drops again as sales weaken
Volkswagen has reported another sharp drop in profit at the start of 2026 amid weak global demand.

The company said net profit fell 28.4% to €1.56 billion ($1.82 billion) in the first quarter, while revenue slipped 2.5% to €75.7 billion.

"Wars, geopolitical tensions, trade barriers, stricter regulations, and fierce competition are creating headwinds," said CEO Oliver Blume , according to the statement.

Deliveries dropped 4% to 2.05 million vehicles, with declines in China and the US outweighing gains in Europe.

Finance chief Arno Antlitz said rising tariffs alone were adding around €4 billion in annual costs, warning existing cost-cutting plans were no longer enough.

Volkswagen says it will step up savings efforts and overhaul its business model to restore profitability after last year’s steep earnings slump.

Results were also hit by weaker performance at subsidiary Porsche and truck unit Traton, both of which reported significant profit declines.

The company has already stated plans to cut some 50,000 jobs in Germany by 2030.

Could VW's Osnabrück car plant pivot to arms production?