According to the ZEW institute, the German investor confidence plummeted in June over increasing concerns about the economies of Spain, Greece and other countries in the Eurozone.
The Institute reports that its monthly confidence index dropped by 27.7 points to a level of minus 16.9 points — its strongest decline since October 1998.
ZEW president Wolfgang Franz says the financial market experts who were surveyed are clearly warning against an over-optimistic assessment of Germany’s economic prospects this year.
“The risks of a pronounced decline in economic activity in countries with close trade ties to Germany are very clear,” Franz said.
The DAX index reversed its early gains and is currently falling 0.2 percent.
Daimler, Volkswagen and BMW are declining 3.1 to 2.1 percent. MAN is down 1.9 percent.
Germany is the biggest contributor to the euro-region bailouts for Greece, Portugal and Ireland, with commitments to the European Financial Stability Facility worth about ^211 billion, or 27 per cent of the total.