Friedrich Merz, the chancellor candidate for the conservative Christian Democratic Union, acknowledged the need for a “major effort” to revive the economy as his party pledges to return German growth to 2 percent over the next five years through changes to the welfare and tax systems.

Germany’s economy, the largest in Europe, contracted for the second year in a row in 2024, official data showed Wednesday, underscoring the challenges facing the region as it tries to get economic growth back on track.

Germany’s economy contracted for a second straight year in 2024, underlining the scale of the challenge that will face a new government after elections due in February, including the possibility of fresh tariffs on its exports to the U.

Germany’s economy shrank for a second consecutive year in 2024 and is unlikely to grow much in 2025, laying bare the challenge for the country’s new government once snap elections are held in February.