ZEW economists: euro zone still biggest risk to Germany

Published October 16, 2012

| Reuters

The euro zone's debt crisis and the possibility that a member state may default remain the biggest risks to the German economy, economists at Germany's ZEW institute said on Tuesday.

"(The biggest risk is) still the euro zone. There's still a risk that some countries in the euro area ... will default," said ZEW economist Marcus Kappler. "We do not see that at the moment, but the debt crisis is not over and there remain a lot of risks."

His colleague Christian Dick said a plan by the European Central Bank to buy unlimited bonds of struggling euro zone members had not brightened the mood of investors in the euro zone overall.

Earlier, ZEW's index for analyst and investor sentiment rose the second month in a row in October, climbing more than expected and suggesting the euro zone debt crisis is not hitting the bloc's largest economy as much as feared.

(Reporting by Sakari Suoninen and Eva Kuehnen)

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