Germany's Merz tells Europe to assert itself to safeguard peace, prosperity

By Madeline Chambers

BERLIN, Dec 31 (Reuters) - Europe must assert its interests more strongly to ensure peace and prosperity in 2026 amid challenges from Russian aggression, global protectionism and changing ties with the U.S., German Chancellor Friedrich Merz said in his annual address.

Since taking office in May, Merz has helped spearhead European efforts to support Ukraine against Russia's invasion. Berlin has also ramped up defence spending since 2023 in a bid to show it is ready to assume more responsibility.

In his New Year's speech, Merz pulled no punches, saying the "terrible" war raging on Europe's doorstep posed a direct threat to continental freedom and security.

"We are seeing more and more clearly that Russia’s aggression was and is part of a plan targeted against the whole of Europe," said Merz, adding that Germany faced sabotage, espionage and cyberattacks on a daily basis. 

He said a further challenge came from protectionism in the global economy, and that Europe's dependence on imported raw materials was increasingly being wielded as a political lever against it.

Struggling to revive its export-oriented economy, Germany is trying to reduce reliance on China as it also grapples with global trade tensions and the effects of U.S. President Donald Trump's trade tariff policies.

Europe's biggest economy has also been hit by what many economists say has been a lack of domestic reform and investment in recent years, and is expected to grow only modestly this year after two years of contraction.

Merz also addressed a more difficult partnership with the United States, long the reliable guarantor of German and European security, since Trump returned to the White House in January 2025.

"For us Europeans, this means that we must defend and assert our interests much more strongly by ourselves," said Merz. 

However, he said Europe must be guided by confidence, not fear, and must take matters into its own hands.

"This can be a decisive year for our country and for Europe. It can be a year in which Germany and Europe, with new strength, reconnect with decades of peace, freedom and prosperity."

(Reporting by Madeline Chambers; editing by Mark Heinrich)