Germany’s central bank Bundesbank warns that the country’s economy may fall into recession in the near future. (File photo)
Germany’s central bank has warned that the worsening financial condition in the European Union (EU) has endangered the German economy, saying the country may fall into recession in the near future.
According to a statement released by Bundesbank on Friday, “The cyclical outlook for the German economy has dimmed…. Since debt crisis escalates further in some (European) countries, it is probable that the economy... may fall in the final quarter of 2012 and the first quarter of 2013.”
The latest reports indicate that even Europe’s powerhouse in manufacturing is not immune to the economic crisis in the eurozone.
On November 9, German Finance Ministry warned that "there will be a noticeably weaker economic dynamic in the winter half-year."
On September 24, the Munich-based Ifo economic institute reported that Germany’s business confidence had fallen to the lowest level since February 2010.
Another report released by the German Labor Ministry last month revealed that the gap between the rich and poor continues to widen in Europe’s biggest economy.
Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, and Spain.
The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.