09 November 2011 17:53 [Source: ICIS news]
The uncertainty surrounding the resolution of the eurozone sovereign debt crisis may have a major impact on world trade, the council said in a report to the government.
“In case of a stagnation of global trade,
“There is a real danger that the already fraught funding conditions for sovereigns may tighten further”, with Germany’s economy facing increasing risks from “a vicious circle of an interlocking sovereign debt crisis and a banking crisis”, it added.
However, overall the council said it sees such “a worst-case scenario” as less likely than alternative scenarios.
“Even after considering all external risks, one needs to bear in mind that Germany’s economy is in a relatively good position, when compared with other countries”, in particular with regard to employment and government deficits, the council said.
For its part, the council forecast 0.9% GDP growth for
While the upturn in
The council also said that despite the heated debate about risks German taxpayers may face from the eurozone debt crisis,
The numerous appreciations of the D-Mark in the past caused severe economic problems for exporters and destroyed many jobs, the council said.
It also pointed to the situation in Switzerland, where that country’s central bank recently decided to peg the Swiss franc to the euro in order to counteract the impact of the strong franc on the economy.
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