Germany's economic powerhouse is on shaky ground.

Life in the UK, this is the Marketplace Morning Report from the BBC World Service.

I'm Leanna Byrne. Good morning.

Germany is known for its industry, but these days it's been battling a deep economic slump.

Last year, its economy shrunk with GDP down by two tenths of a percent.

That follows a decline of three-tenths of a percent in 2023.

So what's going on?

Let's ask Karsen Bretzky, economist at ING Bank.

Hello.

Yeah, hello.

So how did Germany get here?

Well, that's a long story.

And it was clearly a disaster in the making. I think what we see now

with the second year with contraction or a small recession in Germany, it's the result of two

little investments over the last 10 years, a loss in international competitiveness, the changing

role of China, so from export destination to

a fierce competitor of the German export sector. And then on top of that, we saw this throughout

2024. There were higher interest rates. There was policy uncertainty. The automotive industry

was clearly in severe problems. And as this list is so long,

it also already shows us it's not going to be an easy one to get out of here. Now, in six weeks,

there's going to be a snap election in Germany. So how do you think the economics is going to

play into the political in that one? Well, it definitely does. We saw that, well, the government more or less collapsed over a

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