Figures show German business confidence surged more than predicted in March, a sign the European economy is gaining strength.
The IFO think-tank spoke to 7,000 firms and as a result increased its business climate index to 98.1 from 95.2 – the highest since June 2008.
“You can’t say that we are out of the woods yet. Look at the job market or the banks and their subdued lending. There are still a lot of bumps on the road. But the big crisis is definitely over, recovery clearly has begun.” said IFO spokesman Kai Carstensen.
Meanwhile, Chancellor Angela Merkel has rejected a call from France for Germany to do more to reduce its reliance on exports.
Merkel ignored calls for tax cuts, saying there can be no question of abandoning the traditional centrepiece of the German economy.
The experts say warmer weather in Germany paved the way for increased consumer spending and construction.
Government stimulus measures brought in during the recession have also helped keep control of unemployment, which held steady at 8.2 percent.
In turn, the weaker euro boosted export prospects further.