“Germany, Europe’s largest economy, will be tipped into recession as the sovereign debt crisis roiling its neighbors extends into the new year, according to the Bloomberg Global Poll.
Even as European leaders laud their latest fix for Greece’s debt woes, 53 percent of 862 investors, analysts and traders who are Bloomberg subscribers said this week they think Germany’s economy will drop into a recession for the first time in more than three years. Sixty-four percent expect Europe’s debt turmoil to deepen again despite recent signs of calming in its financial markets.
A slump in the German economy would remove a rare engine of demand for the rest of the continent, probably extending the euro-area-wide recession that was confirmed last quarter. A contraction would also pose a challenge for Chancellor Angela Merkel who is seeking a third term in elections next year amid domestic disquiet with three years of supporting Europe’s debt- lashed governments.
“Germany is starting to feel some pressure as sentiment in the euro-zone weighs on its economy,” said Chanoine Webb, a poll participant and global investment analyst at Close Brothers Asset Management Ltd. in London. “It won’t be able to decouple for much longer.” ”
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