German retail sales fell at the largest annual rate since records began in 1994, highlighting the scale of the economic challenges facing the eurozone’s largest economy, the Financial Times reported. Retail sales volumes dropped 8.8 per cent in June compared with the same month last year, data from Destatis, the German office for national statistics, showed on Monday.

Germany’s annual inflation rate has declined slightly for the second consecutive month, official data showed Thursday, but July’s pace of 7.5% was still within sight of the nearly half-century high it reached in May, the Associated Press reported. Inflation in Europe’s biggest economy rose 7.9% in May from a year earlier, the highest level since the early 1970s, before slipping to 7.6% last month. The preliminary monthly figure for July, reported Thursday by the Federal Statistical Office, is usually confirmed in a final report about two weeks later.

Germany’s economy hasn’t grown for nearly five years. Its recovery from the Covid-19 pandemic has been weaker than any major advanced economy. Its ability to fill its energy needs is in question. And now the country once known as the economic engine of Europe is teetering on the brink of a recession, the Wall Street Journal reported. It’s a sharp turn of fortunes for Germany’s large manufacturing sector, which flourished over the past two decades just as other Western nations saw industrial jobs migrate to Asia.

Germany's state Economic Stabilisation Fund (ESF) has cut its stake in Deutsche Lufthansa to less than 10%, the Federal Finance Agency said on Wednesday, citing stabler conditions at the group, Reuters reported. The ESF took a 20% holding in Lufthansa as part of a government bailout to keep the airline afloat through the COVID-19 pandemic, and had previously reduced the share to 14.1%. The further reduction came "against the backdrop of Lufthansa's stable corporate development", the agency said.

Deutsche Lufthansa said that it was canceling more than 1,000 flights ahead of a one-day walkout by ground staff scheduled for Wednesday, just as families across Germany head off on their summer holidays, Reuters reported. Strikes and staff shortages have already forced airlines including Lufthansa to cancel thousands of flights and caused hours-long queues at major airports, frustrating holidaymakers keen to travel after COVID-19 related lockdowns.

Germany has finalized a plan to bail out struggling energy firm Uniper, Chancellor Olaf Scholz confirmed on Friday, Deutsche Welle reported. The wholesale gas and electricity importer is threatened with bankruptcy over skyrocketing energy prices from the Ukraine war. Scholz told a news conference in Berlin that the government will take a 30% stake in the energy firm. He added that his administration would make up to €7.7 billion ($7.8 billion) available as hybrid capital and expand a credit line to €9 billion through the state-run bank KfW.

Germany is ready to make a decision on a bailout for Uniper SE “soon” but ongoing talks with the company are “difficult,” Bloomberg News reported. Uniper - which is heavily dependent on Russian gas - asked the German government for a bailout on Friday, the first major corporate casualty of Moscow’s squeeze on European energy flows. The government is prepared to help the company no matter what, said a spokeswoman for the government. Germany and Uniper have been locked in talks for weeks over a potential rescue package.

German lawmakers approved a measure on Thursday that will allow the government to throw a lifeline to companies struggling with the record-high price of gas and with cuts in supplies from Russia, the New York Times reported. The law, passed in the lower house of Parliament, is part of a wider package that aims to help Germany maintain the security of its natural gas supply as it faces shortages connected to Russia’s invasion of Ukraine. Last month, Russia cut the amount of gas delivered to Germany via the Nord Stream 1 pipeline, a major conduit, by 60 percent.

Germany is set to ditch its plan to return to strict borrowing limits next year if Russia stops natural gas deliveries to Europe’s largest economy for good, Bloomberg News reported. While Finance Minister Christian Lindner has argued that Germany and its euro zone peers must scale back public debt from 2023 to avoid the risk that more deficit spending could fuel historically high inflation, the governing consensus may be shifting.

Power prices in Europe surged on fears that Germany may soon start to limit gas-fired generation and concerns about limited availability of Electricite de France SA’s nuclear fleet, Bloomberg News reported. The German parliament will vote on legislation on Thursday allowing the government to curtail generation from gas plants not deemed to be essential for security of supply to conserve fuel. EDF warned this week that it may have to reduce output at some of its French nuclear reactors during the summer as a drought reduces the amount of river water available for cooling.