The German government has presented its ‘Annual Report on the Economy’ (‘Jahreswirtschaftsbericht’) for 2026. Given the topic, it is not a long document – 136 pages – and if you expect exciting ideas, you will be disappointed.

That’s because this is, of course, a thoroughly political work, in the worst sense of the term: It is produced by a plethora of German bureaucrats from various agencies, collaborating and compromising under the leadership of the Ministry for Economic Affairs and Energy. If “written by committee” entails being anodyne, this is written by whole ministries.

And yet: Look closely, and – badly politicized as it is – Berlin’s Annual Economy Report and the way it was spun for the public can tell you a lot about Germany as it really is now, and why that is a rather sad picture with little hope for quick improvement.

The report demonstrates once again that the current hyper-Centrist coalition government of mainstream pseudo-conservatives (CDU/CSU) and mainstream pseudo-social-democrats (SPD) has no idea how to turn things around.

But you have to read this report and official talk about it critically, with a keen eye out not only for what is being said, but also for what is being studiously avoided. In the bad old days of the last century’s Cold War, Western observers loved to practice “Kremlinology,” that is, interpreting the politics of the former Soviet Union from small signs and big silences. Let’s apply some “Berlinology” to the Annual Report.

Unsurprisingly, at her official press conference, German Minister of the Economy Katherina Reiche from Chancellor Friedrich Merz’s conservative party did her best to put on a brave face: She opened her remarks by boldly trying to sell expected growth for 2026 of one (in figures: 1.0) percent and an even more fragile projection of 1.3 percent in 2017 as an economic “recovery.” Reiche also highlighted a few (very) short-term improvements and offered a pep talk about inflation and real wages, based on projections that may well turn out false.

Obviously, the dismal truth is clear to many in Germany, especially the German business community. The head of the Federal Association of German Industry has been direct: “The expected economic recovery is small and remains fragile.” That is a typical voice. Google and you’ll find more.

If what Reiche has to offer is the government’s case for optimism, it must be desperate and it is not fooling anyone. Even Reiche had to........

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