A sober prognosis

A sober prognosis
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The turn of the year is a bad time for false hopes and is not suitable for drawing a line under the past or conjuring up a new beginning.
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Too much has already been decided, too much has already been laid out. 2026 will not be a year of surprises. It will be a year in which the political decisions of recent years will have a delayed impact on everyday life. Not abruptly, not spectacularly, but insidiously, and that is precisely where the real danger lies. If you take your eyes off the daily headlines and focus on the structural lines, a comparatively clear picture emerges. The social condition of the country will not deteriorate in 2026 because a single drastic law comes into force, but because several developments will take effect simultaneously. Each one on its own might be manageable. However, when they overlap, they create a burden that primarily affects those who already have little leeway.

by Günther Burbach

[This article posted on 12/31/2025 is translated from the German on the Internet, www,manova.news.]



Let's start with basic social security. If the politically announced tightening of the citizen's income system is implemented, with stricter participation requirements, expanded sanctions, and a stronger focus on control rather than support, then it is very likely that poverty will not decrease, but rather become more entrenched. Sanctions have no activating effect where structural problems make access to the labor market difficult: illness, care responsibilities, lack of childcare, regional job shortages. The consequences are predictable: incomes fall, psychological stress increases, and social participation is further restricted. Poverty is not overcome, but managed, disciplined, and increasingly depersonalized.

At the same time, the issue of poverty in old age remains unresolved. If pension adjustments continue to lag behind price increases for rent, energy, and care, the situation of older people will continue to deteriorate in 2026, even without formal pension cuts. The political avoidance of fundamental reform shifts the problem into the everyday lives of those affected. Poverty in old age is rarely vocal. It manifests itself in quiet decisions to make sacrifices: less heating, poorer nutrition, avoiding doctor's visits. The fact that more and more older people are collecting deposit bottles or are dependent on supplementary social benefits is not a moral failure, but a logical consequence of political inaction.

This development is particularly dramatic in conjunction with the housing market.

If social housing construction continues to lag significantly behind demand and, at the same time, more apartments are being removed from social housing than are being built, the housing shortage will continue to worsen in 2026. And not only in the big cities. Rents are also rising in smaller towns and rural areas, while affordable housing is disappearing. For many people, this means displacement, forced relocation, and the loss of social networks.

The housing shortage is no longer a marginal phenomenon, but a structural risk. It creates uncertainty even for those who work and have an income, and it exacerbates social division without being addressed consistently at the political level.

Added to this are developments in the health and care system. If hospital reform is implemented as planned, with greater centralization and economic control, medical care will be organized more efficiently but will be less accessible to those with lower incomes. At the same time, co-payments for care will continue to rise, while the shortage of skilled workers remains unresolved.

For people with low pensions or without a family network, this will mean a real deterioration in the security of care in 2026. Health is increasingly becoming a question of money, even if this connection is rarely openly acknowledged.

These social burdens are compounded by the already strained financial situation of local authorities. If cities and municipalities remain structurally underfunded while social spending rises, they will be forced to make cuts in 2026 where there is the least political resistance. Social counseling, prevention services, and youth and senior citizen work will come under pressure. The welfare state is not officially withdrawing, but is breaking down locally: quietly, uncoordinated, and varying from region to region. For those affected, this does not feel like reform, but rather like a creeping loss of support.

This internal social erosion is further exacerbated by economic developments. If massive government borrowing to finance military spending continues, it will inevitably put pressure on other policy areas in 2026. Debt is not an abstract quantity. It structures priorities. Funds that are tied up in military procurement in the long term are not available for social housing, education, care, or municipal infrastructure.

Even if social spending remains stable in nominal terms, it is losing its real impact. The state will invest less, administer more, and delegate responsibility further down the line.

At the same time, the country's industrial base is continuing to thin out. If energy-intensive and industry-driven companies relocate their production or postpone investments, this will have a noticeable impact on the labor market in 2026. Not across the board, but concentrated in certain regions. Industrial jobs are more than just income. They stabilize entire regions, secure municipal budgets, and finance social security systems. If they are lost, chain reactions occur: suppliers get into difficulties, purchasing power declines, and municipalities lose revenue. The causes are well known: attractive subsidy programs in the US, predictable energy prices abroad, and less regulatory uncertainty. If these conditions remain in place, 2026 will not be a year of industrial awakening, but one of selective retreat.

Energy policy further exacerbates this situation. If electricity prices remain high in the long term or can only be cushioned by government subsidies, then the competitiveness of the location is structurally at risk. No country can subsidize energy prices in the long term in such a way that they remain globally competitive without taking massive budgetary risks. For companies, this means uncertainty and reluctance to invest. For households, it means rising costs, directly through electricity and heating bills, and indirectly through price increases along the entire value chain. Energy will thus become not only an ecological issue in 2026, but also a social one.

Added to this is the continuing dependence on imported gas, especially from the US. If this dependence remains, then energy policy vulnerability will merely have shifted, not been reduced. Pricing and delivery conditions are beyond democratic control. The result is permanent volatility that neither households nor industry can reliably calculate.

Social compensation measures will thus become a permanent fixture, politically contested and financially limited.

Putting all these developments together paints a clear, albeit sobering, picture for 2026. It is not a single shock that threatens social cohesion, but the accumulation of several burdens. Rising unemployment meets high living costs. Local government weakness meets growing social needs.

Political promises meet limited scope for action. State elections take place in a climate where social insecurity is greater than confidence in political solutions. If this reality is ignored, it is not so much support for radical answers that grows as alienation from politics as a whole.

What further exacerbates this situation in 2026 is the psychological effect of a society that is becoming accustomed to deterioration. The phrase “That's just the way it is” is more dangerous than any slogan. It marks the point at which political conditions are no longer perceived as changeable, but as a law of nature. When that happens, the welfare state is not abolished, it is quietly gutted. Not by one big cut, but by a thousand small decisions that seem plausible individually, but add up to a single direction.

This direction is closely linked to the question of government priorities. If a significant portion of public funds is tied up in long-term defense projects, this creates a double pressure: first, budgets become tighter, and second, political energy is focused on security and military logic, while social issues are treated as “secondary.” The problem here is not just the “if,” but the “how.” Military procurement is rarely flexible; it creates commitments that last for years, sometimes decades. And while a housing construction program or municipal investments could theoretically be adjusted, large defense projects are often so politically and contractually fixed that they continue even in the face of economic headwinds. The social consequences are predictable: in times of dwindling resources, those areas that do not have a strong lobby or whose benefits cannot be immediately translated into headlines come under pressure.

If, at the same time, the industrial base continues to thin out, this will not only be a labor market problem, but also a stability problem. This is because deindustrialization, or more soberly put, relocations, investment freezes, and the reduction of energy-intensive production, hits Germany where it hurts. Industrial jobs are on average better paid, more secure in terms of collective bargaining agreements, and contribute disproportionately to the financing of the community through taxes and levies. If this base shrinks, not only will incomes fall, but so will the ability to finance social systems in a stable manner. 2026 would then not be the year in which “everything suddenly changes,” but the year in which many regions realize that well-paid jobs cannot simply be replaced by “something digital.”

In this scenario, the possibility of higher unemployment is not a bold thesis, but a plausible consequence. When companies relocate, close down, or stop investing, chain reactions occur: suppliers lose orders, logistics shrink, and service providers disappear. The situation becomes particularly critical where there are no regional alternatives.

Those who live in a metropolitan area at least have the opportunity to reorient themselves, while those who live in an industrial region often lose not only their jobs but also the economic foundation of the entire area. This is the point at which social tensions are no longer theoretical, but concrete: more welfare dependency, more debt, more mental illness, more conflicts within families, more migration of younger people.

Many will then say, “But the state can take countermeasures.” Yes, it can do that in the short term, and it will try to do so. But this is precisely where the next causal chain lies. If energy prices remain high or unstable in the long term, a government can compensate for this for a while. It can put a cap on electricity prices, set up hardship funds, and support companies. But it cannot permanently subsidize a location artificially to make it competitive without overburdening itself financially.

And even if it tries, subsidies are no substitute for planning security. Companies do not invest because “there happens to be funding available right now,” but because the framework conditions are reliable. If they are not, investment will not materialize, and that is precisely the silent mechanism that could continue to operate in 2026.

Energy is the central nerve in this. High electricity prices act like a tax on production. Volatile gas prices act like a lottery for households. Both make everyday life and the economy difficult to calculate. And if Europe, whether by choice or for lack of alternatives, remains heavily dependent on imported liquefied natural gas, the dependency will only shift geographically, not structurally. This means that pricing and security of supply depend on global markets, on political decisions made by other countries, and on transport and infrastructure issues that are difficult to control at the national level. For 2026, therefore, it is plausible that the uncertainty will continue rather than ease, with the result that social compensation measures will remain necessary but will become increasingly difficult to bear politically and financially.

These economic tensions then have very tangible social consequences. If rents continue to rise, not only will the housing shortage worsen, but so will the entire social structure. Those who are displaced often lose their way: school, doctor, family, neighbors, support. This is not only stressful, it is existential. And if we are honest, this is one of the biggest tipping points: housing is the basis for stability.

Those who lose their homes or are only able to live temporarily can hardly participate in politics, hardly make plans, hardly stay healthy. 2026 could be the year in which “housing” finally becomes a central social issue; not as an activist topic, but as a broad everyday experience.

Added to this are health and care costs, which cast a second shadow over many households. When co-payments rise, waiting times get longer, and care becomes more centralized, this means not only inconvenience but real exclusion for people with little money and limited mobility. Those who live in rural areas often experience “structural reforms” as a retreat: longer distances, fewer services, more bureaucracy. And those who are ill rarely have the strength to fight their way through digital portals, application procedures, and telephone waiting loops. 2026 could be the year in which the silent inequality in care becomes more visible, not in statistics, but in biographies.

In the end, all of this ends up with the local authorities. When social demand increases—more housing subsidies, more counseling needs, more youth welfare, more psychosocial stress—while revenues are simultaneously weakening, cities and municipalities come under pressure. And local authorities are the place where the state becomes real for most people. Not in the Bundestag, but in the citizens' office, in schools, in youth welfare offices, in local clinics, in social services. When savings are made there, people feel the withdrawal immediately. That is the moment when abstract budget debates turn into concrete deterioration in living standards. So 2026 may not be the year of the big political decision, but the year when people realize that the state no longer functions reliably in everyday life; not out of malice, but out of overload.

And then there are the elections, especially state elections, which fall into this climate. If social realities are not addressed credibly, it is not so much support for complex programs that grows, but rather the longing for simple explanations. The problem here is not that “people are becoming stupid.” The problem is that uncertainty calls for order. Those who fear decline seek support. Those who cannot find stability seek someone to blame. If politicians and the media underestimate this dynamic, they will not be surprised by a sudden “shift to the right” in 2026, but by a progressive alienation that has long been underway.

This is not a doomsday scenario. It is a cold description of a possible continuation of the current trajectory. And that is precisely why it is so unpleasant: because it is not spectacular enough to raise the alarm, but consistent enough to become probable. In this scenario, 2026 will not be a year in which everything collapses. It will be a year in which many things continue to slide without it being perceived as scandalous. And that is precisely the point at which a decision must be made: Do we want to accept this direction, or do we want to interrupt it politically?

Oh yes, in all likelihood it will get warmer. After last summer, at least that's a small ray of hope. Or is it?