THEZew index, which measures the confidence of German businesses and investors in the state of the economy in Germany, it fell beyond all expectations in June, even going into negative territory.
Compared to the May index, in fact, which marked 10,8, that of June lost 27,7 points, settling at -16,9 points, the lowest since October 1998. Analysts were expecting a much more limited decline, at 4,0 points. The sub-index related to current conditions however, it dropped by 10,9 points, from 44,1 in May who 33,2.
According to the Zew institute, this decline reflects the deterioration of the banking sector, as well as the uncertainty for the Greek elections, which had not yet consumed when the data was collected. "Although Germany is not going into a recession" said Wolfgang Franz, president of the institute "the risks of a marked decline in economic activity in countries with which it has close trade ties are very clear".
