German business sentiment deteriorated for the seventh month running in December according to the latest survey by the Ifo economic think tank. Exporters are suffering most as the German economy slides recession.
Germany relies on exports and Ifo’s President, Hans-Werner Sinn, said the US economy’s troubles will have a long term impact: “We think that the Americans are going to face a very difficult 10 years or more. Because it is impossible to wipe out a current account deficit accumulated over decades in just one economic cycle.” The Berlin government has launched a 32 billion euro economic stimulus plan to try to offset the worst effects of the recession but has acknowledged more is needed. Ifo said the 7,000 German businesses it questioned this month were more pessimistic than at any time since 1982 when the survey covered only the former West Germany before reunification.