Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here. A bridge over the River Elbe in central Dresden collapsed without warning this month, causing no injuries but disrupting a main transport artery in the eastern German city. It could pass for a symbol of the malaise at the heart of the country. Yesterday Mercedes-Benz became the latest German icon to disappoint, slashing its outlook. The gloomy forecast follows grim news from BMW and Volkswagen, as the nation’s carmakers stagger under competition from China and the transition to electric vehicles. The auto industry’s woes add to warning signs for the world’s third-largest economy, already struggling to escape prolonged stagnation. Early in its term, Chancellor Olaf Scholz’s three-way coalition made what looked to be astute bets on future-proofing the economy, waving huge subsidies to attract an Intel semiconductor “megafab” and a Northvolt battery plant, after Tesla opened its only European car factory in Germany in 2022. All are now in trouble: Tesla has shed workers as EVs sit unsold; Intel this week postponed its plans; Northvolt is in financial difficulty. Industrial giants like BASF are, meanwhile, burdened by high energy costs due to Russia’s war on Ukraine that make Germany increasingly uncompetitive. Against that backdrop, the government investigating its bungled sale of a stake in Commerzbank seems almost run of the mill. It’s a formidable set of challenges that’s seen voters turn on the coalition parties, and is likely to contribute to another strong result for the far-right AfD party in Sunday’s state election in Brandenburg. For all that, Scholz’s political fortunes looked up this week. Well ahead in national polls, the main opposition CDU/CSU installed Friedrich Merz as their candidate for chancellor in the federal election one year from now. Of the three possible choices, he’s seen as the least appealing to voters. If you’re Scholz, you’ve got to look for upsides wherever you can find them. — Alan Crawford The collapsed Carola Bridge in Dresden, Germany. Photographer: Jens Schlueter/Getty Images |