Authorities in Germany are preparing to convert underground stations and other public buildings into bomb shelters, citing the growing risk of war with Russia.

According to Bild newspaper, the Federal Office for Civil Protection is actively researching public spaces that could be repurposed as shelters. The agency also plans to launch an app to help residents locate nearby shelters during emergencies.

The German public will be encouraged to build private shelters in their homes, particularly in basements. This shift comes after Germany reduced its public shelter network in 2007, when authorities deemed it unnecessary.

Currently, Germany—a country with a population of 84.4 million people—has only 579 public shelters, capable of accommodating just 500,000 individuals.

Ralph Tiesler, head of the Federal Office for Civil Protection, emphasized the urgency of the situation, warning that it could take years to rebuild a robust network of shelters. He called for faster solutions to address potential threats.

To expedite preparations, authorities have begun compiling a comprehensive list of potential shelter sites, including underground stations, offices, and other public buildings. In addition, they are developing a civil protection app with a live map showing the nearest available shelters. A public awareness campaign is also being planned to educate citizens on self-protection measures.

The opposition Christian Democrats (CDU) criticized the government’s preparedness for Russian air strikes, urging an immediate increase in shelter capacity. CDU MP Andrea Lindholz stated, “Although we hope that such a situation will not arise, we must be prepared to protect the population in an emergency. We need to significantly increase shelter capacity in Germany.”

Lindholz pointed to Poland as a proactive example. Starting in 2026, Poland will require all new buildings to include access to emergency shelters. The country has also identified temporary shelters such as underground stations and tunnels to protect its entire population.

For comparison, the British research organization Subterranea Britannica reports that the United Kingdom has 276 bunkers designed to safeguard the population during a nuclear attack.

Eurozone business activity fell sharply in November, raising the likelihood of a half-percentage-point interest rate cut by the European Central Bank (ECB) in December.

The Eurozone Composite Purchasing Managers’ Index (PMI), a widely watched economic indicator, unexpectedly dropped to 48.1 points, a 10-month low, according to estimates released on Friday by Hamburger Handelsbank. This reading is below the critical 50-point threshold that separates growth from contraction. Analysts had anticipated no change from last month’s neutral reading of 50.

“In the medium term, the outlook is gloomy, particularly due to the potential impact of [US President-elect Donald] Trump’s tariff policy on European growth,” said Christophe Boucher, chief investment officer at ABN AMRO Investment Solutions, in a note to clients quoted by the Financial Times (FT).

Rate cut already priced in

Investors reacted swiftly, with markets increasingly pricing in the possibility of a larger rate cut at the ECB’s 12 December meeting. The probability of a half-point cut nearly doubled to 55%, as implied by swap markets.

The weaker-than-expected business activity data also impacted the euro, which fell more than 1% to $1.033, marking its lowest level against the dollar since the energy supply crisis of late 2022.

Both the manufacturing sector and the services sector contracted in November, with the latter posting its lowest activity levels in 10 months.

“The eurozone manufacturing sector is sinking deeper into recession, and now the services sector is starting to struggle after two months of marginal growth,” said Cyrus de la Rubia, chief economist at HCOB, which publishes the index with S&P Global.

Recession likely to extend into early 2025

The PMI survey, regarded as one of the most reliable leading indicators of economic activity in the euro area, is closely monitored by monetary policymakers. Recent months have seen growing concerns within the ECB about sluggish growth and a faster-than-expected decline in inflation.

In the third quarter of 2024, the euro area’s economy grew by just 0.4% quarter-on-quarter. The ECB responded in October with its second consecutive quarter-point rate cut, bringing interest rates down to 3.25%.

So far, markets have broadly expected policymakers to implement additional quarter-point rate cuts over the next four meetings. However, November’s poor data has heightened fears of a recession, particularly for the last quarter of 2024 and the first quarter of 2025.

Commerzbank economist Ralph Solveen described the latest PMI figures as a “palpable setback” for hopes of a near-term recovery, adding that a recession now seems inevitable.

German exports continue to decline

Germany, the eurozone’s largest economy, has faced even worse-than-expected economic challenges. On Friday, Destatis, the German federal statistical office, halved its forecast for real GDP growth in the third quarter to 0.1%, following a 0.3% contraction in the second quarter.

Weak foreign trade played a significant role, with exports declining by 1.9% quarter-on-quarter, while imports rose marginally by 0.2%. The trend persisted in October, with exports to non-EU countries plummeting by 6.9%, according to a separate statement from Destatis.

“Germany has entered a protracted recessionary phase in a roundabout way,” said Andreas Scheuerle, an economist at Deka Bank in Frankfurt. He noted that a combination of cyclical and structural problems is weighing heavily on the EU’s largest economy, describing the situation as “poisonous.”

Defense Minister Boris Pistorius has officially withdrawn as the Social Democratic Party’s (SPD) top candidate for the upcoming election, ending weeks of speculation about his potential to replace Chancellor Olaf Scholz.

In a video message released by the SPD on Thursday evening, Pistorius stated that the ongoing public debate had harmed the party’s unity. He informed the party leadership that he was unsuitable for the chancellorship.

“Olaf Scholz is a strong chancellor and the right candidate for the chancellorship,” Pistorius said, emphasizing that the party leader embodies “reason and common sense.” He further urged, “We now have a joint responsibility to bring this debate to an end because there is a lot at stake.”

When Scholz triggered early elections two weeks ago, many assumed he would automatically serve as the SPD’s candidate, given his role as the incumbent chancellor. However, polls revealed that Pistorius, who has been defense minister since early 2023, had become Germany’s most popular politician, sparking a de facto leadership race.

Scholz faces declining approval ratings

In contrast to Pistorius’ popularity, Scholz suffered from one of the lowest approval ratings among German politicians. Voters blamed him for months of political infighting that crippled the three-way “traffic light” coalition, which ultimately collapsed earlier this month.

Despite this, the SPD central leadership continued to back Scholz. Meanwhile, Pistorius faced increasing criticism for failing to address the leadership speculation. In his video message, Pistorius denied initiating the controversy but acknowledged that it had caused “growing uncertainty” within the party and “resentment” among voters.

He emphasized that the decision to step aside was his own and pledged his full support to Scholz, whom he described as an “extraordinary” chancellor. Pistorius also affirmed his commitment to campaigning for the SPD’s re-election.

Supporters react with disappointment

Pistorius’ withdrawal left many of his supporters disheartened. “I regret this development. The aim now must be to work together and achieve the best possible election result for the SPD,” said Joe Weingarten, an SPD member of parliament, in an interview with Der Spiegel.

Another MP, Johannes Arlt, remarked, “I would have preferred a different decision, but now we have one. It is good for the party and the country. We will now go into the federal election campaign united.”

A two-way race for the chancellorship

With Pistorius stepping down, the race for the chancellorship is now expected to be between Olaf Scholz and Friedrich Merz, leader of the opposition Christian Democrats (CDU). Merz, a millionaire and former BlackRock Germany executive, has been polling ahead of Scholz since taking over the CDU leadership in 2022. Scholz’s supporters, however, remain optimistic that he can close the gap and outperform Merz in the upcoming election.

Pistorius: A proponent of German remilitarization

Known for his pragmatic approach to military affairs, Pistorius, 64, earned respect for his tough stance on Russia and advocacy for Germany’s rearmament. Following his appointment as defense minister in 2023, he made clear his opposition to the SPD’s historical reluctance to increase military spending.

Describing Vladimir Putin as “the despot in the Kremlin,” Pistorius warned that Germany must boost defense investments and ensure it is “combat ready.” His hardline approach on security and defense issues distinguished him within the SPD and cemented his popularity among voters.