European Economics > Unemployment hits ten-year high in Germany; France consigning next generation to a lifetime of debt

 

German unemployment hits ten-year high

The country’s economy is facing a third consecutive year without growth

© Getty Images / skynesher

Unemployment in Germany has risen to its highest level in a decade, official figures released on Friday show. The labor report comes as the country’s faltering economy risks contracting for a third consecutive year.

The figures show the number of unemployed individuals topping 3 million in August for the first time since 2015. The month-on-month increase came in at 46,000 to put the tally at 3.02 million in seasonally unadjusted terms, or 6.4% of the population.

Federal Employment Agency chief Andrea Nahles blamed the labor market struggles on Germany’s weak economy. The EU’s largest economy shrank by 0.2% in 2024 after contracting by 0.3% in 2023. This year, following a 0.3% expansion in the first quarter, output fell by 0.3% in Q2 as uncertainty grew over new US tariffs. The International Monetary Fund recently warned that Germany could face a third consecutive year without growth.

Germany’s economic downturn has coincided with Berlin’s decision to halt imports of low-cost Russian energy, which was vital for its industry. European gas prices rose sharply after Russian pipeline deliveries largely stopped and the Nord Stream pipelines were sabotaged later that year. Before the sanctions, Germany sourced 55% of its gas from Russia, but has since shifted to pricier liquefied natural gas (LNG) imports from the US and Qatar.

READ MORE: EU sanctions against Russia don’t work – Bild

Moscow has denounced the Western sanctions as illegal and ineffective, arguing they have instead backfired on the countries that imposed them.

Chancellor Friedrich Merz stated last week that Germany is facing a “structural crisis” rather than temporary “weakness,” and said steering the economy toward growth has proven more difficult than expected. Key industries such as the automotive segment are “no longer truly competitive,” he added.

The country’s automotive sector has shed more than 51,000 jobs just in the past year alone, according to recent data.

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French PM admits debt will devastate next generation

Paris has spiraled into uncontrolled borrowing for the comfort of “boomers,” Francois Bayrou has said

French Prime Minister Francois Bayrou in Paris, France, August 28, 2025. © Getty Images / Adnan Farzat/NurPhoto

France has saddled the younger generations with debts they’ll be paying off their entire lives, French Prime Minister Francois Bayrou has said. Paris continuously borrows in the interest of “boomers” and “certain political parties,” he added.

On Monday, Bayrou said he urged President Emmanuel Macron to reconvene parliament by September 8 for a confidence vote to gauge support for his €43.8 billion ($50.9 billion) austerity measures plan. The prime minister has long sounded the alarm over the country’s spiraling budget deficit, which hit 5.8% of GDP last year – almost double the EU 3% ceiling.

The primary victims of the government debt will be the “youngest French people,” Bayrou said in an interview with French broadcaster TF1 on Wednesday.

“They’re the victims; they’re the ones who will have to pay the debt for the rest of their lives,” he said, adding that Paris is trying to convince them that more borrowing is needed.

READ MORE: French debt ballooning by €5,000 a second – PM

“All this for the comfort of certain political parties and for the comfort of the so-called boomers.”

His proposals to battle France’s $3.98 billion government debt have included scrapping public holidays, slashing public sector jobs, as well as welfare and pensions cuts. The program has been criticized by left-wing parties, who have accused Paris of prioritizing military spending over social welfare.

Macron has promised to increase France’s military budget to €64 billion by 2027, citing external threats. Paris has warned of a potential war scenario within the next five years, naming Russia as one of the principal threats – claims which Moscow has dismissed.

READ MORE: Macron wants ‘boots on the ground’ in Ukraine

Bayrou’s proposed budget has not been well received by the French public, polls suggest. While most French people agree with the prime minister’s alarmism about the national debt, 76% believe his budget will not help, and 82% see it as socially unfair, according to an Elabe survey from Tuesday.

Around 81% want a new prime minister to be elected, and 67% called for Macron’s resignation, according to Elabe’s poll. Nearly three-quarters say they want Bayrou to fail in the vote on September 8, which is to be his ninth no-confidence motion.

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Canadian Convulsions > Incredibly Reckless Spending by the Trudeau Government

 

Canada Had Largest Debt Increase Among G7 Countries Over Last Decade: Fraser Institute

Canada’s total government debt has grown substantially since 2014 and has outpaced that of nearly every other advanced country around the world, according to a new study from the Fraser Institute.

The study, “The Deterioration of Canada’s Finances Internationally” released May 15, compared Canada’s finances during the last 10 years to that of 40 other advanced countries internationally, including G7 countries. The authors found that Canada experienced one of the largest increases in government size over the last decade and now has one of the highest debt burdens of any advanced economy country.

“Simply put, over the past decade, the size of government in Canada and the overall government debt burden have grown faster than nearly every other advanced economy in the world,” says the report, authored by the Fraser Institute’s policy analyst Grady Munro and Jake Fuss, director of fiscal studies.

“This has translated to a deterioration in the state of Canada’s finances relative to comparable countries, and likely means lower economic growth and reduced living standards for Canadians.”

Total government spending in Canada increased from 38.4 percent of the country’s economy in 2014 to 44.7 percent in 2024. This makes Canada the 17th highest for total government expenditures out of the 40 advanced countries analyzed.

“Canada’s 6.34 percentage point increase in government spending relative to the economy was the second-largest increase out of all 40 advanced economies, and the largest in the G7,” the study says. “Only Estonia experienced a greater increase in the size of government during this period at 6.66 percentage points.”

Munro and Fuss’s study indicated that Canada had the largest increase in both spending and debt among the G7 countries. Germany had the second-highest spending increase among the G7, with a 5 percentage point increase, followed by a 2.9 percentage point increase for the United Kingdom, 2.3 for the United States, and 1 percentage point for Japan. France and Italy both saw decreased spending during the past decade, by 1.2 percentage points and 0.2 percentage points respectively.

Canada’s debt burden jumped by 25.23 percentage points since 2014, the third-highest increase in debt among the 40 economies and the largest increase in debt among G7 countries. Although Canada’s debt burden increased significantly, 20 of the 40 countries decreased their total debt burden, for an average 2.79 percentage point decrease among the 40 countries over the last decade.

France’s debt burden was second highest among the G7 countries, with a 17 percentage point increase, followed by the United States with 16.4 percentage points, the United Kingdom with 14.1, Japan with 3.4, and Italy with 0.5. Germany was the only G7 country to reduce its debt burden, with a 10.6 percentage point decrease.

The authors said the Canadian government relied heavily on borrowing money to fund its expansion and spending increase, which in turn increased federal and provincial government debt.

The Canadian government’s gross debt increased to 110.8 percent of GDP in 2024, from 85.5 percent in 2014, indicating that Canada now has the seventh-highest indebtedness ranking out of the 40 countries analyzed, and the fifth highest among the G7 countries.

“Canada likely suffers lower economic growth than it otherwise would have with a lower debt burden,” the study says. “This problem will only worsen if debt continues to grow relative to the size of the economy.”

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Many countries saw a spike in debt burden during the pandemic in 2020 as governments borrowed money to fund pandemic-related programs while the economy was in recession. However, Canada borrowed the most relative to the size of its economy, Munro and Fuss said. In 2020 alone, Canada’s debt burden increased by 27.86 percentage points.

“Research suggests that growing spending and rising debt in Canada are likely to harm overall economic growth,” the study says.

An increasing government debt burden corresponds to higher interest payments for taxpayers, less money for key services, and higher taxes for the future generations of Canadians, Munro said in a news release.

“Taxpayers ultimately pay for government debt in the form of interest payments, which divert money away from key services, and future generations of Canadians could face higher taxes to pay for today’s borrowing,” Munro said.

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Liberals Carney plans to mortgage Canada for the next several generations - worse than Trudeau

 

Justin, come back! We found someone dumber than you!

Liberals’ Platform Promises $130 Billion in New Spending, Larger Deficits

Liberal Leader Mark Carney speaks during the French-language federal leaders' debate in Montreal on April 16, 2025. The Canadian

The Liberal Party has released the price tag of its election platform, which comes to about $130 billion in new spending over the next four years while running deficits until at least fiscal year 2028–29.

Realistically, for at least the next four years as well even if everything goes well.

The party released its costed platform on April 19, a day after advance voting opened for four days over the Easter weekend, with election day fast approaching on April 28.

Most of the items had previously been announced on the campaign trail by leader Mark Carney.

New defence spending, housing, and tax cuts are some of the commitments that come with the biggest price tags included in the $129.2 billion spending.

The fiscal and costing plan only includes tariff revenues for the current fiscal year, indicating that $20 billion is expected to be generated in 2025–26 from Canada’s counter-tariffs imposed in response to U.S. tariffs on Canadian imports. These include aluminum, steel, vehicles, and other goods not covered under the U.S.-Mexico-Canada trade agreement.

It’s a move that Carney said was deliberate. “We don’t want to rely on those tariff revenues ... so we concentrate them today and will deal with them tomorrow,” he said during a campaign stop in Whitby, Ontario, on April 19.

The costed Liberal platform predicts a deficit of $62.3 billion this fiscal year followed by a lower deficit in 2026–27 of around $60 billion. It forecasts a further drop for the 2027–28 fiscal year to a deficit of $55 billion, and then $48 billion in 2028–29.

“This is not a normal fall update, budget lockup,” Carney said. “We are in the middle of the biggest crisis of our lifetimes, and this is a plan that meets that moment in a way that is very prudent with people’s hard-earned tax dollars, but bold in terms of where this country can go.”

Carney said a government he runs would also tackle spending, saying the Liberal government had been previously “spending too much.”

“We’re going to bring that level of spending growth down from 9 percent to 2 percent,” he said.

I presume he means a 2% increase.

“We will do it in a way [such that] we will not cut any transfers to provinces, to territories, or individuals. We will protect all of those, but we will balance our operating budget over the next three years by cutting waste, by eliminating duplication, and by deploying technology.”

Boosting Military Spending

The Liberals committed to an increase of some $18 billion toward national defence and to meet NATO’s target of 2 percent of GDP by 2030. The spending increase will cover a pay raise for Canadian Armed Forces (CAF) members, the platform document said.

Carney’s plan also includes building new housing on bases across Canada and ensuring access to child care and doctors, including mental health services, for CAF members and their families.

The platform also includes money for new submarines and additional heavy icebreakers for the Royal Canadian Navy.

Canada will also buy more aerial and underwater drones to survey the Arctic and the country’s undersea infrastructure and borders under the Liberal plan. Money will also be spent on purchasing Canadian-made airborne early warning and control aircraft and building new deepwater ports to support destroyers patrolling Northern waters.

Housing

The Liberal platform includes a $6 billion investment in a new initiative, dubbed Build Canada Homes, tasked with building and acquiring affordable housing, supportive housing, and shelters, including on public lands.

In addition, Carney’s plan would see over $25 billion in financing offered to innovative prefabricated homebuilders and $10 billion in low-cost financing and capital to homebuilders to build housing targeting middle- and low-income Canadians.

Tax Cuts

The Liberals also reiterated in their platform their earlier pledge to lower the tax rate on the lowest income tax bracket, bringing it down 1 percentage point from 15 percent to 14 percent.

Carney said the cut would come into effect by Canada Day 2025

For first-time homebuyers, the platform makes room for cutting the GST on homes up to $1 million and reducing the GST on homes between $1 million and $1.5 million.

Criticism

The Canadian Taxpayers Federation criticized Carney’s budget plan, calling it “even more irresponsible than the Trudeau plan.”

In an April 19 news release, the group said Carney’s plan will add $225 billion to the federal debt, considering the projected annual budget deficits of $62 billion, $60 billion, $55 billion, and $48 billion over the four years from 2025–26 to 2028–29.

As you can see, there won't be a balanced budget in 2029-30 or any time soon after that. Canada will be heavily mortgaged for the next several generations.

The federation noted that, according to the 2024 Fall Economic Statement, former Prime Minister Justin Trudeau had planned on increasing the debt by a smaller amount, $131.4 billion, over that same four-year period, with annual deficits running at $42.2 billion, $31 billion, 30.4 billion, and then $27.8 billion.

Conservative Leader Pierre Poilievre likewise criticized the size of the deficits in the Liberals’ election platform, saying it would lead to inflation.

“Amazingly, Carney plans to run EVEN BIGGER inflationary deficits than Justin Trudeau had already budgeted,” he said in a social media post. “This inflationary spending means higher taxes and higher cost of living.”

Poilievre says his party will be releasing its costed platform soon.

NDP Leader Jagmeet Singh said the Liberal platform includes cuts that “could come in health care and services.”

“The Liberals are proposing massive cuts at a time of potential recession, uncertainty, anxiety and worry, and that is the last thing that we need,” Singh said at a campaign stop in Burnaby, B.C., on April 19, where the NDP also released its costed platform.

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