German companies are in the crosshairs of hostile takeovers and need to capitalise to be able to fend off hostile corporate measures. TUI, stronger than ever after the bankruptcy of FTI Touristik, has ordered the start of pre-sales for holidays to the south of Gran Canaria for the summer of 2026. The bleak economic situation has led DZ Bank economist Christoph Swonke to describe Germany as the "new problem child of the eurozone". Meanwhile, hotel-owning funds are raising prices for tour operators just when they most need the support of honest destinations like the south of Gran Canaria.
Concerns about Germany’s economic decline have been mounting in recent months, with the country’s key automotive sector particularly hard hit. A series of negative news stories — from Volkswagen AG’s threat to close domestic factories to Intel Corporation’s decision to postpone a new €30.000 billion semiconductor plant in the former communist east — have highlighted the many challenges facing Germany.
The government of Germany, the main source market for tourism south of Gran Canaria, said on Wednesday that its economy, Europe’s largest, is on track to contract for a second year in a row, underscoring the unpopular government’s problems as it heads into a tough election year. The new forecast for gross domestic product to shrink 0,2% this year contrasts with the government’s forecast in April for 0,3% growth and is in line with economists who had also forecast a slight contraction. The German economy shrank 0,3% in 2023. The grim economic situation has led DZ Bank economist Christoph Swonke to describe Germany as the “new problem child of the eurozone.”
The German government is forecasting growth of 1,1% next year and 1,6% in 2026, when TUI is launching its Maspalomas holidays from 17 October for pre-booking. The German economy has not seen strong growth since 2018, as the country's structural problems have been compounded by broader global challenges. In the midst of the crises, Germany and Europe are caught between China and the US and must learn to assert themselves.
Berlin has tackled many of Germany's problems at home: securing its energy supply, speeding up planning procedures, cutting red tape and trying to solve the shortage of skilled workers. The business climate index compiled by the Munich-based Ifo institute recorded its fourth consecutive decline in September. The institute's president, Clemens Fuest, said the economy was "under increasing pressure." Most company executives surveyed by Ifo were dissatisfied with their current situation and pessimistic about the prospects for their businesses.
