Economists Snower and Merkl (2006) suggest that the malaise was prolonged by all the social and economic help from the German government, pointing especially to bargaining by proxy, high unemployment benefits and welfare entitlements, and generous job-security provisions.

[11] The German economic miracle petered out in the 1990s, so that by the end of the century and the early 2000s it was ridiculed as "the sick man of Europe.

While the rest of the European Community struggled with financial issues, Germany took a conservative position based on an extraordinarily strong economy after 2010.

[17][18] On June 20, 1991, the Bundestag decided that the parliament and parts of the government and central administration would be relocated from Bonn to the capital, Berlin.

Shortly after the formation of the government, Minister of Finance Oskar Lafontaine, a former SPD chairman and rival of Schröder, resigned from the cabinet.

Chancellor Schröder supported the war on terror following the September 11 attacks against the United States, and Germany sent forces to Afghanistan.

However, Germany supported the United States militarily in other parts of the world, notably in the Horn of Africa and Kuwait.

However, as the Bundesrat of Germany had a CDU/CSU majority, the government of Gerhard Schröder was dependent on support from the conservatives in order to pass legislation.

Schröder argued that it had become increasingly difficult to push for the necessary socio-economic reforms because of the opposition majority in the upper house of the parliament, the Bundesrat, as well as the tensions within his own party.

After losing this vote, as intended, on July 1, Chancellor Schröder was able to ask President Horst Köhler to call new federal elections.

On 21 July 2005 the President agreed to Chancellor's request and dissolved the parliament, scheduling early parliamentary elections for 18 September.

This was resolved on November 11, 2005, when both parties agreed to form a grand coalition led by Angela Merkel who became the first female Chancellor of Germany.

In January 2009 the German government approved a €50 billion economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates.

Since 2014, the newly established right-wing populist Alternative for Germany (AfD) party were elected for various Landtag mandates.

Germany was affected by the European migrant crisis in 2015 as it became the final destination of choice for many asylum seekers from Africa and the Middle East entering the EU.

[26] In March 2018, Angela Merkel formed another grand coalition with Social Democrats (SPD) after five months of political deadlock since September's election.

He formed a traffic-light coalition government with the Greens and the FDP after the SPD won a plurality as a result of the 2021 federal election.

[30] Russia's invasion of Ukraine in 2022 and its economic effects dominated Scholz's early foreign and domestic policies.

[31] Scholz's Zeitenwende speech three days after the start of the invasion signaled a foreign policy shift in contemporary Germany, with billions of dollars in investments in the German military.

[16] On 5 June 2023, The Alternative for Germany (AfD) in Thuringia won its first district election in Sonneberg, despite all the other parties supporting the CDU Candidate.