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Thinktank sees German economic confidence drop

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Thinktank sees German economic confidence drop

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The ongoing crisis in Greece hit German business confidence hard in May says the Mannheim-based think-tank ZEW, which also cites uncertainty in the financial markets as reasons for a huge drop in economic sentiment.

The index, which surveys 225 analysts and investors, slumped from 53.3 to just 41.9; far more than even the lowest forecast. However ZEW says despite Q1 growth only hitting 0.3%, few of those questioned predicted any economic decline.

The think-tank did identify three major risks to the outlook: the Greek crisis, prolonged US economic weakness reducing German exports, and more German strikes.