Germany updates: Cabinet approves 2026 draft budget

A council in the town of Leinfelden-Echterdingen near Stuttgart in southwestern Germany has mandated that an almost completed mosque be demolished. 

The local Leinfelden-Echterdingen council, in a majority vote, said the Islamic association that built the mosque would have to tear it down at the end of the year at its own expense.   

Click or tap here to read more about the mosque and the decision calling for it to be torn down. 

German sportswear brand Adidas warned that prices may rise because of US tariffs that could add an extra €200 million ($230 million) to its costs in the second half of the year. 

Shares in Adidas, the world's second-largest sporting goods company, fell more than 8% after uncertainty around US tariffs and weaker-than-expected sales.

"We still do not know what the final tariffs in the US will be," CEO Bjorn Gulden said in a statement. "We also do not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation."

Gulden also said US tariffs alone had a "negative impact in the tens of millions" during the second quarter. 

He added that once tariffs are finalized, "there will be a pricing review."

According to Gulden, any price rises would only affect the United States.

Adidas produces its products in countries which are facing hefty US tariffs, including Vietnam and Indonesia. Earlier this month, the US announced a 20% levy on many exports from Vietnam and a 19% tariff on goods from Indonesia. 

Even though trains are the safest and most sustainable mode of transportation, they are vulnerable to extreme weather.

What lessons can be learned from the recent train derailment in southern Germany?

Read the full story on how Germany is planning to make its rail network more resilient.

The German Cabinet has approved Finance Minister Lars Klingbeil's 2026 draft budget, which outlines spending of €520.5 billion ($600.3 billion) and new borrowing totaling about €174 billion.

Europe's largest economy is shifting away from decades of fiscal conservatism to revive economic growth, modernize its aging infrastructure, and boost military spending.

German lawmakers are expected to begin discussions on the budget by the end of September, with final approval anticipated by year's end.

Berlin's large New Year's Eve party at the Brandenburg Gate will not take place this year, organizer Benedikt Alder told the German news agency, DPA.

The cancellation follows a decision by the Berlin city government to withdraw financial support for the celebration. 

Berlin's Governing Mayor Kai Wegner told DPA that the city will no longer fund the show, which has drawn thousands of revelers and millions of TV viewers over the decades.

"In my opinion, it's not the job of taxpayers to finance such events," Wegner told dpa. "Especially not in times of tight budgets."

With no financial backing secured, organizers were left with no choice but to call off the festivities, Alder said. 

Germany's Interior Minister Alexander Dobrindt is reviewing the nationwide use of security software developed by the US company Palantir.

A ministry spokeswoman told Stern magazine that the evaluation is ongoing and no decision has yet been made.

The software was specifically developed for security agencies and is used by intelligence services, the military, and police.

"Palantir is not a neutral IT provider but closely linked to U.S. intelligence agencies with clear geopolitical aims,"Johannes Schätzl, a Social Democrat lawmaker, said.

He added that German security forces should not use the company's software.

Green Party deputy leader Konstantin von Notz said that at a time when the US government is becoming less reliable, cooperation with Palantir should be ruled out.

Dobrindt generally supports the use of such software and received backing from Jens Spahn, a fellow member of the ruling conservative CDU/CSU. Spahn said Palantir "would greatly help" police, adding that criminals use all digital tools available and "the state must keep up within the law."

Last week, the Society for Civil Rights and the Chaos Computer Club filed a constitutional complaint against Palantir's use in Bavaria, arguing that it violates privacy rights by linking unrelated individuals to criminal data.

The software is used on the state level in Bavaria, Hesse and North Rhine-Westphalia.

Germany's economy shrank in the second quarter, according to provisional data released on Wednesday.

The country's gross domestic product (GDP) fell by 0.1% compared to the first quarter, the federal statistics office Destatis said. This follows a modest revision of Q1 growth to 0.3%.

Destatis said the quarterly decline was due to lower investment in machinery, equipment, and construction. However, consumer and government spending provided some support.

Year-on-year, GDP remained flat when adjusted for prices, but showed a slight increase of +0.4% when calendar effects were also considered.

A rescue mission is underway in northern Pakistan for German Olympic biathlon champion Laura Dahlmeier, who was seriously injured in a rockfall on Laila Peak in the Karakoram mountain range.

The 30-year-old was climbing at around 5,700 meters (18,700 feet) when falling rocks swept her away. Her climbing partner raised the alarm after being rescued.

Officials say helicopter access is impossible.

"The conditions at the altitude where she was injured are extremely challenging, and a team of foreign climbers will launch a ground rescue mission today," Areeb Ahmed Mukhtar, a senior local official in Ghanche district, said. 

Dahlmeier, a seasoned mountaineer, made history at the 2018 Winter Olympics, winning both the sprint and pursuit events.

German news channel Welt TV is launching a weekly program entirely produced and hosted by artificial intelligence. 

Titled KI-Welt, the show covers topics like AI, robotics, and future tech, with all editorial processes, from research to presentation, handled by AI with human supervision. 

Jan Philipp Burgard, Welt TV's editor-in-chief, said the experimental show is to show what is already possible with AI. 

"We won't be able to stop the AI revolution, so we should embrace it and help shape it," he said. 

A computer-generated avatar anchors the show. The first episode will air on Thursday.

Profits at German carmaker Mercedes-Benz have fallen by 55.8% in the first half of the year, the company says.

The Stuttgart-based carmaker said post-tax earnings plummeted from €6.1 billion to around €2.7 billion in the first half of the year.

The business cited tariffs, lower sales volumes, and costs linked to efficiency measures as reasons for the decline. 

Looking ahead, Mercedes now expects full-year group revenue to fall significantly below last year's level. 

The German government is expected to approve the 2026 draft budget on Wednesday, which outlines spending of €520.5 billion ($600.3 billion) and new borrowing totaling about €174 billion.

Finance Minister Lars Klingbeil's budget includes €126.7 billion in investments earmarked for modernizing the country.

The government, in office since May, has pledged to increase spending to upgrade infrastructure and strengthen the military.

Officials also hope the budget will help improve the economic climate, which is projected to recover noticeably in 2025 and 2026 after two years of stagnation.

Klingbeil, however, warned this week that significant austerity measures will likely be needed starting in 2027, when a funding gap of approximately €172 billion is expected.

Guten Morgen from the Bonn newsroom, still staffed by humans.

That's no longer entirely the case over at Welt TV, where a new weekly program will soon be produced and presented entirely by artificial intelligence.

Meanwhile, the German government is tackling the 2026 draft budget the old-fashioned way, without AI assistance, at least as far as we know.

In a notable shift from its long-standing tradition of fiscal restraint, Germany is now spending big: aiming to jumpstart the economy, modernize its aging infrastructure, and boost military investment.

We'll be keeping an eye on those stories, and more, right here in this blog.