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German economy not immune to EU financial crisis: ECB

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European Central Bank (ECB) Governing Council member Erkki Liikanen

Member of the European Central Bank (ECB) Governing Council Erkki Liikanen warns that the worsening financial condition in the eurozone may endanger the ‘German economy’.

“Economic developments are causing us concern. No country is immune to the effects of the (EU) debt crisis. Not even the German economy,” said Liikanen on Saturday.

“There are a number of indications that the economy is getting weaker … across the euro zone,” he added.

The remarks came after Germany’s central bank issued a statement on December 7, saying, “Since debt crisis escalates further in some (European) countries, it is probable that the German economy… may fall in the final quarter of 2012 and the first quarter of 2013.”

German Finance Ministry also warned on November 9 that “there will be a noticeably weaker economic dynamic in the winter half-year.”

The Munich-based Ifo economic institute reported on September 24 that Germany’s business confidence had fallen to the lowest level since February 2010.

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.


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