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Reform of Germany’s economy faces serious challenges


 Significance
 Arguably the greatest challenge for his three-party government, which includes the Greens and Free Democrats (FDP), will be addressing the need to transform Germany’s economy for the 21st century, particularly the digital and green transformations. 
 
 
 Impacts
 The new government will seek to make legal immigration rules more flexible to offset the impact of Germany's ageing population. 
 The global shortage of semiconductors will slow the recovery for Germany’s auto-mobile industry. 
 Germany’s export dependence on China will make Berlin reluctant to adopt a hardline stance on Beijing. 
