Wembanyama wins NBA defensive player of the year

The world's biggest auto show opens in Beijing on Friday, as Chinese manufacturers solidify their status as industry innovators and foreign brands face ferocious competition in the country's giant car market.

Brands such as Volkswagen, Toyota and BMW once dominated in China, but have steadily lost market share to domestic firms that beat them to the electric vehicle revolution and undercut them on price.

Electric cars are also getting a boost as oil prices sent spiking by the Mideast war nudge drivers away from fossil-fuel powered models.

Dozens of carmakers will display their latest models at the 10-day exhibition in the Chinese capital, with domestic manufacturers like BYD, Xiaomi and Xpeng now at the forefront of integrating AI software and autonomous driving technology into their EVs.

Foreign brands have been "too slow to localise decision-making and product development", said Bill Russo, founder of Shanghai-based consultancy Automobility.

"The basis of competition in China has fundamentally shifted from hardware and brand to software, speed, and ecosystem integration," Russo told AFP.

Mercedes-Benz's China sales plunged 19 percent last year, while fellow German brand BMW saw sales hit their lowest level since 2017.

Volkswagen, long the largest seller in China, is battling to maintain a Chinese market share while also fending off competition at home.

The German car giant plans to cut 50,000 jobs domestically by 2030, after post-tax earnings fell 44 percent last year.

- 'Centre of gravity' –

"China is now the centre of gravity for automotive innovation, not just production," Russo said.

Foreign automakers are increasingly collaborating with local companies to keep pace with technological advances.

BMW has partnered with battery maker CATL, while Audi is using Huawei's driving assistance systems and Volkswagen is developing EVs together with Chinese brand Xpeng.

"The golden time for foreign brands has passed," said Ernan Cui, an analyst at Gavekal Dragonomics in Beijing.

"Chinese brands... are upgrading much faster."

Foreign manufacturers also face being outcompeted in other markets, as Chinese carmakers look abroad to boost profitability.

Chinese brands already control around a fifth of the auto market in Latin America, and plan to boost overseas production to 3.4 million vehicles by 2030 from 1.2 million in 2025, according to consulting firm AlixPartners.

Major players like BYD have high hopes for the Middle East and European markets, with sky-high tariffs keeping Chinese models out of the United States.

The European Union had imposed tariffs of up to 35.3 percent on EVs imported from China, but in January agreed that Chinese carmakers could accept minimum prices to sell into the bloc.

Still, BYD is building a factory in Hungary to manufacture cars for Europe, Leapmotor is due to start making EVs in Spain this year and Chery said Tuesday it wants to produce a small electric vehicle in Europe.

- Too many players -

But Chinese brands are also facing headwinds as a ferocious price war at home eats into profit margins.

"There are still too many players in the market with too much investment behind them," according to Cui.

"The losers are not quitting the market as fast as they are supposed to because they have investors' backing, local governments' backing, who do not want their existing investments to be written off," she said.

BYD logged a record 2.26 million EV sales in 2025, but net profit declined 19 percent.

Overall, Chinese passenger car sales fell 17.4 percent in the first quarter of this year, according to the China Passenger Car Association (CPCA), as the government scaled back incentives for EVs.

In that context, Chinese brands "are increasingly treating overseas markets as a strategic growth pillar rather than simply an outlet for excess capacity", Russo said.

China exported more than 2.6 million new energy vehicles -- which includes electric and hybrid autos -- last year, more than double in 2024, according to the China Association of Automobile Manufacturers. 

Meanwhile, higher oil prices caused by the US-Israeli war on Iran are reinforcing the economic incentives for EVs, which is likely to further benefit Chinese brands, according to Russo. 

Exports of Chinese electric vehicles more than doubled in March, compared to the same month last year across all manufacturers, according to the CPCA.

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Germany has learned that Russia plans to halt the flow of Kazakh oil through the Druzhba pipeline to a refinery in eastern Germany starting May 1, the energy ministry in Berlin told AFP on Wednesday.

The German subsidiary of Russia's state-owned oil company Rosneft told German regulators that the Russian energy ministry had ordered the halt, the ministry said, adding that Moscow had not confirmed the decision directly to the German government.

The move comes amid Russia's war against Ukraine and a global energy crisis sparked by the US-Israeli war against Iran, which has caused major disruptions to global oil and gas markets.

Rosneft Germany "is currently assessing the implications" of the pipeline closure for the refinery and is "utilising all available options to ensure security of supply in Germany", the ministry said.

The PCK refinery near the Polish border supplies much of the Berlin region with fuel, but the German government voiced confidence on Wednesday that the impact would be limited.

Government spokesman Stefan Kornelius said that changes in the "output from the pipeline will not significantly restrict refinery operations", although he added that officials are keeping a close eye on the availability of kerosene in particular.

The German government's "fundamental assessment of the supply situation remains unchanged at the moment", Kornelius said.

The economy ministry said "the lack of Kazakh oil deliveries to the PCK refinery does not ultimately jeopardise the security of supply of mineral oil products in Germany, even if PCK Schwedt would have to operate at a lower capacity utilisation".

A ministry spokeswoman added that the refinery has another pipeline connection to the Baltic Sea port of Rostock, allowing potential seaborne deliveries of crude oil.

The Kazahk oil is currently transported via the Druzhba pipeline, which runs through Russian territory. 

One branch of the pipeline runs through Belarus and Poland to Germany, while another branch runs through Ukraine to Hungary.

Damage to the separate Ukrainian section of the pipeline caused a major political rift between Hungary and Ukraine, with Hungary's outgoing Prime Minister Viktor Orban vowing to block a European Union loan for Kyiv until the pipeline is restored. 

The German government took Rosneft Germany into trusteeship in the wake of Russia's 2022 full-scale invasion of Ukraine and European Union sanctions on the Russian energy sector.

Kazahk oil was sourced for the PCK refinery to replace Russian crude imports that had previously fed the refinery.

The German government has been searching for a new buyer to take over the Rosneft subsidiary, which is the majority owner of the refinery.

Last year, Berlin won an exemption from US sanctions against the Russian oil industry for the refinery, arguing that Rosneft Germany had been entirely "decoupled" from its parent company.

After Moscow sent its forces into Ukraine, Germany sought to take control of a swathe of Russian energy assets in the country.

It seized Russian gas firm Gazprom's subsidiary in Germany, which had been a key energy supplier before the war but slashed deliveries in apparent retaliation for Western sanctions on Moscow.

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Vietnam's top leader To Lam hosted South Korean President Lee Jae Myung in Hanoi on Wednesday, announcing a dozen cooperative agreements including on tech innovation and development of nuclear power plants.  

South Korea is Vietnam's biggest source of foreign investment and one of its top trading partners, with two-way trade topping $90 billion last year.

Lee's visit showed "high political trust" between the two countries, Lam said during the meeting at the presidential palace. 

It was the second meeting in less than a year between the two Asian leaders, following Lam's visit to Seoul in August. 

Hanoi wants more South Korean investment in infrastructure, advanced electronics manufacturing, semiconductors, artificial intelligence and renewable energy.

Among the agreements signed on Wednesday was a framework for a Vietnam-South Korea "master plan on cooperation in science, technology and innovation".

Other agreements dealt with digital cooperation, intellectual property, and the development of nuclear power plants.

Lam, who became president this month in addition to Communist Party boss, is pushing a "new growth model" that prioritises digital and technological innovation as Vietnam aims to escape the "middle-income trap".

The World Bank said in its 2024 development report that countries usually hit such a "trap" when they reach around 10 percent of annual US GDP per capita, which can prove tough to move past.

Vietnam and South Korea have set a target of achieving $150 billion in bilateral trade by 2030. 

South Korean giant Samsung is Vietnam's largest foreign corporate investor, having sunk more than $23 billion into the Southeast Asian country, according to the finance ministry. 

Samsung Electronics is planning to invest another $4 billion in a chip packaging factory in northern Thai Nguyen province, according to recent reports. 

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The EU on Wednesday gave a preliminary green light to unblocking a 90-billion-euro ($106 billion) for Kyiv, after a months-long row between Ukraine and Hungary over a damaged pipeline. 

Diplomats said Budapest was given 24 hours to sign off definitively as it waits for Russian oil to arrive through the Druzhba pipeline after Kyiv said operations had restarted. 

The bitter feud over the pipeline pitted Hungary's nationalist premier Viktor Orban against Ukrainian President Volodymyr Zelensky, stalling the vitally needed funds for Kyiv.

Resolving the standoff would allow Brussels to start paying out the loan in the coming months that Ukraine requires to plug its budget four years into Moscow's invasion. 

Kremlin-friendly Orban -- who suffered a crushing election defeat this month -- insisted that he would not budge until Ukraine repaired the pipeline hit by a Russian strike. 

Officials said Wednesday Ukraine had restarted pumping oil to Hungary and Slovakia, a day after Zelensky announced the repairs were completed. 

Hungarian energy giant MOL said it "expects the first crude oil shipments following the restart of the Ukrainian section of the pipeline system to arrive in Hungary and Slovakia by tomorrow at the latest".

Slovakia's Economy Minister Denisa Sakova also said the first deliveries were expected in the early hours of Thursday, in a post on Facebook.

Hungary and Slovakia -- among the most Kremlin-sympathetic EU member states -- had accused Kyiv of dragging its feet over the repairs.

Zelensky has made no secret of his staunch opposition to the fact that some EU members still buy Russian oil and gas -- a key source of revenue for Moscow to fund its invasion launched more than four years ago.

- Sanctions approval too? -

The row with Hungary has held up EU support for Ukraine at a time when the United States has largely cut Kyiv off and eased sanctions on Russian oil amid the Iran war.

Orban's loss in elections after 16 years in power had fuelled hopes that the funds would be unlocked. 

But EU officials had believed they may have to wait until his pro-EU successor Peter Magyar takes office in May to get it approved.   

Alongside the loan, EU countries also looked to a approve a fresh round of sanctions on Russia that had been stalled by both Hungary and Slovakia over the pipeline row.   

The new round of economic punishment for Moscow -- the 20th from the EU since the war started in 2022 -- includes measures Russia's energy, banking and trade sectors.

Zelensky on Tuesday urged the EU to begin ratcheting up sanctions on Moscow again at a time when US President Donald Trump has eased pressure on the Kremlin.

Slovak Prime Minister Robert Fico, who has repeatedly clashed with Kyiv and Brussels, said Wednesday that he "would not be surprised if the 90 billion loan were unblocked and then oil supplies were cut off again".

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Iranian forces targeted three container ships on Wednesday, seizing two and firing on a third, global security monitors and the country's Revolutionary Guards said, the latest incidents to threaten a crucial trade route in the Middle East war.

British maritime security agency UKMTO said an Iranian gunboat fired at a container ship off the coast of Oman Wednesday, while a ship off Iran was also fired upon.

Iran's Revolutionary Guards (IRGC) said separately that their naval forces stopped two ships attempting to cross the Strait of Hormuz and directed them to Iranian waters.

It accused them of breaching its blockade of the route, imposed in the Middle East war that erupted on February 28 with US and Israeli strikes on Iran.

"The master of a container ship reported that the vessel was approached by one IRGC gunboat... that then fired upon the vessel, which has caused heavy damage to the bridge. No fires or environmental impact reported," the United Kingdom Maritime Trade Operations centre said.

It added that the incident took place 15 nautical miles northeast of Oman and all the crew were safe.

According to British maritime security firm Vanguard Tech, the vessel was sailing under a Liberian flag and "had been informed it had permission to transit the Strait of Hormuz".

Iranian news agency Tasnim said the ship had "ignored warnings from Iran's armed forces".

The IGRC said its naval force "this morning identified and stopped in the Strait of Hormuz two violating ships".

In a statement, the force said the vessels "were seized by the IRGC's naval forces and directed to the Iranian coast."

The IRGC named the two ships seized as the MSC-Francesca and the Epaminondas, Iranian broadcaster IRIB said on Telegram.

It alleged the Francesca was linked to Israel while the Epaminodes lacked "the necessary permits" and had been "tampering with navigation systems".

Ship-tracking platform MarineTraffic showed the two vessels -- both container ships -- stopped near the Iranian coast on Wednesday.

- Cargo ship fired on -

In a separate incident, a cargo ship eight nautical miles west of Iran was fired upon and stopped in the water, UKMTO said.

"A master of an outbound cargo ship reports having been fired upon and is now stopped in the water. Crew are safe and accounted for. There is no reported damage to the vessel," UKMTO said.

Vanguard identified it as the Panama-flagged containership Euphoria, which it said was "transiting outbound of the Strait of Hormuz".

MarineTraffic later showed the Euphoria had left the strait and was headed to Jeddah in Saudi Arabia.

Shipping through the strategic Strait of Hormuz has been heavily restricted by Iran since the start of the war with Israel and the United States, while the US military is enforcing a counter-blockade of Iranian ports.

US President Donald Trump announced Wednesday that the truce between the two countries would be extended after it first took effect on April 8.

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International Criminal Court judges Wednesday threw out a challenge against the court's jurisdiction by Rodrigo Duterte, meaning the former Philippines president could still stand trial over his war on drugs.

The 81-year-old faces three counts of crimes against humanity at the international court based in The Hague over murders allegedly committed as part of his crackdown on drug users and pushers.

The allegations relate to his time as mayor of Davao city between 2013 and 2016 and then as president until March 2019, when the Philippines withdrew from the ICC.

Duterte's defence had argued the court had no jurisdiction over alleged crimes in the Philippines because the country is no longer subject to the Rome Statute, the ICC's founding text.

The prosecution countered that the alleged crimes occurred while the Philippines was still a member of the ICC and so judges can rule on Duterte's case.

In an initial decision in October, the ICC pre-trial chamber sided with the prosecution, ruling that the investigation into Duterte began before the Philippines withdrawal.

The appeals court threw out the defence team's challenge to that decision.

The court "has rejected all four grounds of appeal," said presiding judge Luz del Carmen Ibanez Carranza.

"Having rejected the entire appeal, the appeal chamber considers that the defence request for the immediate and unconditional release of Mr Duterte is moot," she added.

Duterte's defence lawyer Nicholas Kaufman said he was not surprised by the verdict given the fact that the Duterte trial is the one remaining high-profile case at the ICC.

"Allowing the appeal would have practically emptied the Court's docket," he said in a statement to AFP.

In a separate procedure, judges are weighing whether to confirm the charges against Duterte, the final step before a trial, which would be the first against a former head of state from Asia.

At hearings in February, the prosecution alleged that Duterte was responsible for thousands of deaths during his war on drugs.

His defence said there was no "smoking gun" directly linking Duterte's fiery rhetoric and threats against drug users and actual murders.

In any case, Duterte is unlikely to appear in court.

The court granted his request not to appear for the hearings in February, with his defence saying he was not mentally fit.

The only time he has been seen since his arrest and transfer to The Hague was at an initial appearance via videolink, at which he came across as confused and exhausted.

He did not appear at Thursday's reading of the decision.

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(The Center Square) – Three judges in the 11th U.S. Circuit Court of Appeals late Tuesday upheld an earlier decision to block a judge’s order to wind down operations at Alligator Alcatraz in the Florida Everglades.

The detention center for migrants, opened July 1, can house up to 3,000 in a remote, swamp area near the Dade-Collier Training and Transition Airport. The 11th Circuit said the District Court abused its discretion when it entered the preliminary injunction.

Environmental group Friends of the Everglades, along with the Miccosukee Tribe of Indians of Florida, sued the Department of Homeland Security and other state and federal agencies in June.

The primary complaint was that the federal and state defendants violated the Administrative Procedure Act by constructing the immigration facility without conducting an environmental impact assessment under the National Environmental Policy Act.

The appellate court ruled the environmentalists and the tribe failed to challenge a “final agency action” under the Administrative Procedure Act and also failed to prove a major federal action under the Environmental Policy Act.

While the plan was always for the state to seek reimbursement for the $608 million it cost to build the facility, state officials constructed the immigration detention center using state funds and runs it using state employees.

In a previous court filing, lawyers for the U.S. Justice Department said any potential future federal funding would only cover operational costs, not construction costs.

Second-term Republican Gov. Ron DeSantis declared a state of emergency in January 2023 for “alarming levels” of illegal immigration in Florida that was causing an “unmanageable strain on local resources.” Alligator Alcatraz was then built as a response and used for immigration enforcement under agreements with the federal government allowing the state to do so.

After Tuesday’s ruling, Friends of the Everglades said in a statement they would continue to push back.

“This fight is far from over,” said Executive Director Eve Samples. "Alligator Alcatraz was hastily erected in one of the most fragile ecosystems in the country without the most basic environmental review, at immense human and ecological cost. We are pursuing every legal avenue available to right this wrong."

One judge dissented with Tuesday’s ruling, stating there was enough federal government involvement to trigger an assessment under the National Environmental Policy Act. The judge said it was an error to minimize the federal government’s role and responsibility in immigration detention.

The case will now go back to the District Court.

(The Center Square) – The full Fifth Circuit Court of Appeals ruled Tuesday that Texas public schools may post the Ten Commandments in classrooms. The ruling came three months after the court upheld a similar law in Louisiana. 

The full court overturned a lower court’s ruling on the Texas law, vacated its preliminary injunction, and dismissed the plaintiffs’ Establishment and Free Exercise claim.

In response, Gov. Greg Abbott said in a statement the ruling was a “HUGE WIN,” adding that the Ten Commandments are the” foundation of Western law and morality,” which “belongs in our classrooms. Texas stands for faith, freedom, and the values that founded our great state.”

The state legislature passed SB 10 last May requiring every public-school classroom to post a copy of the Ten Commandments. After signing it into law, and after the state was sued, Abbott said the law was constitutional and would be upheld, The Center Square reported. 

Circuit Judge Stuart Kyle Duncan wrote the opinion for the majority joined by Chief Judge Jennifer Walker Elrod, and circuit judges Edith Jones, Jerry Smith, Don Willett, James Ho, Kurt Engelhardt, Andrew Oldham and Cory Wilson. 

Duncan said the full court heard both the Louisiana and Texas cases and first dismissed the Louisiana case because it was “unripe. Because of differences between the statutes, however, the Texas case is ripe and we can decide it.”

“We conclude the Texas law does not violate either the Establishment Clause or the Free Exercise Clause,” he said, pointing to flaws in the plaintiffs’ arguments. “Because the plaintiffs failed to show that SB 10 substantially burdens their right to religious exercise, their Free Exercise claims must be dismissed,” he wrote.

He also explained why SB 10 “looks nothing like a historical religious establishment. It does not tell churches or synagogues or mosques what to believe or how to worship or whom to employ as priests, rabbis, or imams. It punishes no one who rejects the Ten Commandments, no matter the reason. It levies no taxes to support any clergy. It does not co-opt churches to perform civic functions. These are the kinds of things “establishments of religion” did at the founding. S.B. 10 does none of them.”

In response to the plaintiffs arguing SB 10 is coercive, he said the law isn’t because students “are neither catechized on the Commandments nor taught to adopt them. Nor are teachers commanded to proselytize students who ask about the displays or contradict students who disagree with them. Most importantly, the ‘coercion’ characteristic of religious establishments was government pressure to engage in religious worship. That’s why establishments prescribed liturgies and punished those who skipped them. 

“S.B. 10 is far from that. It puts a poster on a classroom wall. Yes, Plaintiffs have sincere religious disagreements with its content. But that does not transform the poster into a summons to prayer. Because the Texas law has none of the elements of a founding-era establishment of religion, the district court erred in ruling that the law violates the Establishment Clause.”

Ho issued a separate concurring opinion stating neither the Texas nor the Louisiana law “comes close to imposing either an establishment of religion or a prohibition on the free exercise thereof, as originally understood by the Founders or articulated by any governing Supreme Court precedent.” 

He also said America’s founders “didn’t just permit religion in education – they presumed that there would be religion in education. Indeed, they firmly believed that our Constitution wouldn’t work without a religious people,” citing President George Washington. 

Oldham issued a separate concurring opinion in part joined by Willett. He expressed “reservations about justiciability” stating, “It is not obvious to me that these plaintiffs have standing. Their claims hinge on the mistaken premise that individuals can sue because they are offended – a proposition that is wrong as a matter of Constitutional structure and Supreme Court precedent.”

Judges Irma Carrillo Ramirez wrote the dissent, joined by Judges Carl Stewart, Priscilla Richman, Catharina Haynes, James Graves, Stephen Higginson and Dana Douglas. She argues the law requires a permanent fixture of religious rules in public-school classrooms, with no “‘educational function,’ violates the most basic First Amendment principles.”

She also argues the Supreme Court has already ruled on the matter, saying it “long ago held that a statute nearly identical to S.B. 10 violates the Establishment Clause. But apart from that established precedent, which only it can overrule, the Supreme Court has long emphasized ‘the heightened concerns with protecting freedom of conscience from subtle coercive pressure’ in public schools, where classroom requirements that threaten to coerce students ‘to support or participate in religion’ implicate a ‘foremost hallmark of religious establishment.’ It has also held that the Free Exercise Clause protects against classroom requirements that threaten to ‘impose upon children a set of values and beliefs that are hostile to their parents’ religious beliefs’ and ‘pressure’ children to ‘conform.’”

The American Civil Liberties Union and organizations representing 15 Texas families who sued said they were “extremely disappointed” in the ruling. It “goes against fundamental First Amendment principles and binding U.S. Supreme Court authority. The First Amendment safeguards the separation of church and state, and the freedom of families to choose how, when and if to provide their children with religious instruction. This decision tramples those rights.”

They said they plan to appeal to the Supreme Court “to reverse this decision and uphold the religious-freedom rights of children and parents.”

Since the outbreak of war between Iran, Israel and the United States, colourful murals have sprung up across capital Tehran and other major cities, rich in symbolism and themes of resistance and defiance.

Murals and banners have long been a defining feature of Iran's urban landscape, particularly in Tehran, where such paintings in central squares mirror the state's political messaging and foreign policy.

Since the 1979 revolution which established the Islamic republic, such imagery has served as a medium to reflect ideology and collective memory.

In recent days, a mural in Tehran showed a US aircraft carrier carrying rows of coffins draped in American flags, surrounded by small Iranian-flagged boats and a helicopter.

The image evoked dominance at sea, as Iran's armed forces continue a blockade of the strategic Strait of Hormuz, a conduit for a fifth of the world's oil and liquefied natural gas in peacetime.

Another mural depicts a man raising both arms, each wrapped in the Iranian flag, his hands forming a heart.

Another shows the Iranian flag flowing across the wall with its tulip-shaped emblem bearing a missile in its centre, while a young woman carries a banner reading: "We have all come for the revolution," referencing support for the 1979 Islamic revolution. 

Elsewhere, a mural traces a line of clerical leadership in Iran. 

It begins with founder of the Islamic republic Ruhollah Khomeini, followed by Ali Khamenei, who was killed in the opening US-Israel attack of the war on February 28, and culminating with his successor and son Mojtaba Khamenei. 

Separate works depict Iranian drones shattering the Star of David, the emblem of Israel's flag, while one mural shows demonstrators gathered before Azadi Square, chanting "Death to America," with one holding a portrait of Ali Khamenei. 

Among the most striking long-standing anti-US murals are those around the former US embassy in central Tehran, now a museum known as the "Den of Spies." 

One depicts a fractured Statue of Liberty with a broken arm surrounded by scenes of destruction, while another shows the US flag with skulls replacing its stars.

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The German government on Wednesday is expected to cut its growth forecast for this year as the energy shock triggered by the Middle East war hammers Europe's biggest economy.

Hopes had been high that the eurozone's traditional growth engine would sputter back to life in 2026 after a long decline, driven by Chancellor Friedrich Merz's public spending blitz.

But the jump in oil and gas prices since the start of the US-Israeli war on Iran have dealt the economy a heavy blow, pushing up overall inflation and raising costs for the country's crucial manufacturers.

At the start of April, leading economic institutes already slashed their growth predictions for this year to 0.6 percent from a September forecast of 1.3 percent. 

Economy Minister Katherina Reiche is also expected to announce a hefty cut when she unveils the government's new estimate at 1215 GMT.

The government's last official forecast in January predicted the economy would expand one percent this year. 

"The German economy will face a significant burden over an extended period," Merz warned last week as his government unveiled 1.6 billion euros ($1.8 billion) in fuel price relief for households and businesses.

Before the Iran war, the economy was just getting back on its feet after the energy shock triggered by the Ukraine war and last year's US tariff blitz.

The renewed surge in energy prices is a particular burden for Germany's heavy industry, in sectors ranging from steel to chemicals. 

Knock-on effects, like supply chain snarls that are delaying delivery of vital base products, are weighing on industry, while consumers are facing higher costs, especially at the petrol pump.

Inflation jumped to 2.7 percent in March, its highest level in over two years. 

- Investor morale plunges -

Surveys highlight the darkening picture. 

A poll this week showed that German investor morale hit its lowest level in April since late 2022, when the country was battling the fallout from Russia's full-scale invasion of Ukraine.

The government is scrambling to respond. As well as the relief on fuel prices, Merz has announced that businesses can pay workers a tax-free bonus of up to 1,000 euros. 

Still, many economists and business groups have criticised the measures as ill conceived, saying they are not well enough directed at needy groups.

They are calling on the government to instead focus on pushing through deep reforms to areas like healthcare, pensions and bureaucracy that they argue can help spur growth in the long term.

"You cannot cushion a shock like this with tax money or bonus payments," Peter Leibinger, president of the Federation of German Industries (BDI), said this week.

"The state cannot insure citizens and companies against every external crisis," he said. "The only insurance is growth-oriented policies that enable investment."

Businesses have meanwhile become increasingly frustrated with Merz's coalition. 

The chancellor, who took power in May last year, promised to revive the economy through huge public outlays on defence and infrastructure and a barrage of reforms. 

But the spending has moved slowly and structural overhauls have made little headway, bogged down by lengthy talks between his centre-right CDU party and its coalition partners, the centre-left SPD.

The coalition is promising to push through an ambitious programme before parliament's summer recess, though critics doubt what can realistically be achieved so quickly.

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