Germany is at a turning point, and the only way out of the economic crisis is if citizens remain economically active for longer, warned Bundesbank President Joachim Nagel.

The Bundesbank, Germany's central bank and one of the key pillars of the European monetary system, has for years played an important role in maintaining the stability of the euro and the national economy, writes Fenix Magazin citing the German news agency dpa. Its head, Joachim Nagel, is now openly saying that Germany no longer has room to delay reforms.

“We must be honest with ourselves, even when it is not pleasant,” said Nagel. “From the Bundesbank’s perspective, working life must be extended if we want to preserve the level of prosperity that generations of Germans painstakingly built after the Second World War.”

Nagel said that the country must be aware of where the real challenge lies, and that, he says, is competitiveness. If Germany does not adapt, it risks falling behind not only global competitors but also the rest of Europe.

Known as an advocate of decisive reforms, the Bundesbank chief repeats that raising the retirement age is necessary. “We must believe that people will understand how important this is for the future of their children and grandchildren,” he stressed.

Despite the gloomy assessments, Nagel still leaves a glimmer of optimism. He believes that the German economy could begin to recover slowly as early as next year. “I believe we will see stronger growth, but only if we direct future investments wisely. It is like a young plant that is just sprouting, fragile, but it can grow into something strong and sustainable,” he said.

The German economy is currently going through the most difficult period in the past several decades. After two years of recession, economists predict only minimal growth for 2025 as well, while a more tangible recovery, according to estimates, is expected in 2026, with GDP increasing by around 1.3 percent.

The plan for exiting the crisis is based on a special state fund which, over the next five years, should enable massive investments in the economy. However, some analysts have already expressed doubts about the effectiveness of that plan. Nagel dismisses those criticisms as premature.

“It is still too early for us to give up or declare ourselves losers,” he said. “The effects of fiscal policy have not yet been fully felt, and the government knows very well how great its responsibility is.”

The message from the Bundesbank chief is clear: without extending working life and making smart investments, Germany could soon lose what it has built over decades, its status as one of the world’s most stable and competitive economies.