World Bulletin / News Desk
German business sentiment fell for a second straight month in June to its lowest level in over two years, in the latest sign Europe's largest economy is beginning to feel the pain from the euro zone debt crisis.
The Munich-based Ifo think tank said on Friday its business climate index, based on a monthly survey of some 7,000 companies, dropped to 105.3 in June from 106.9 in May.
This was the lowest level since March 2010 and slightly worse than expected, with a Reuters poll of 44 economists forecasting the index would fall to 105.9.
"The euro crisis is really hitting home," Klaus Wohlrabe, an Ifo economist, told Reuters. "It's right on the front doorstep."
The Ifo data add to concerns that Germany's economy is losing stamina and may have contracted in the second quarter after it steamed ahead in the first three months of the year, helping the euro zone avoid recession by growing 0.5 percent.
Other recent data have also pointed to a slowdown. Manufacturing activity is at its weakest level in three years, according a purchasing managers' survey published on Thursday.
Imports tumbled at their fastest rate in two years in April, while exports have declined on weakening demand from within the euro zone, where Germany sends roughly 40 percent of its goods sold abroad.
Firms were more optimistic about current business conditions but a sub-index on business expectations fell to 97.3 from a revised 100.8 in May.
The biggest decline in the June Ifo data was in manufacturing, a sector that has driven German growth over the past year.
The figures were released hours before German Chancellor Angela Merkel travels to Rome to meet with her Italian, Spanish and French counterparts to discuss solutions to the euro zone's sovereign debt crisis.
A significant weakening of the German economy, which has so far remained largely immune to the crisis hitting southern economies like Greece, Italy, Spain and Portugal, could encourage Berlin to take bolder steps.
"The German ship is more solid than all other euro zone ships but latest indicators have been good reminders that even the most solid ship can capsize in a rough thunderstorm," said ING's Carsten Brzeski.
"Maybe there is one upside to the latest batch of disappointing data from the euro zone's biggest economy: it shows that a fundamental solution to the euro zone crisis is also in the interest of the German economy."
After U.S. Federal Reserve Chair Janet Yellen indicated that the central bank was poised to raise interest rates, European stock markets fall.
Italian company Enel will invest 18 billion euro for renewable energy sources in Africa.
Azerbaijani president said in a statement that Southern Gas Corridor project will supply neighboring and European countries for a 100 years
Oil prices rose above $60 due to Iran's call for oil production cut
Economic growth in the Euro-Zone is not at desired levels.
Director and Global Head of Islamic Finance at Standard & Poor's says that growing market for sukuk and new players mark 'significant interest' in Islamic finance.
The Ministry of Finance said that Denmark has written to China to "announce its intention to apply to be a founding member" of the AIIB.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
Federal Reserve removes word 'patient;' interest rate increase expected within months. Yellen says timing of rate rise 'not decided,' but will come anytime after April; holds current rates at 0 to 0.25 pct.
Many emerging-market currencies have fallen against the dollar in recent weeks
Anticipated Federal Reserve interest rate hikes making dollar strong against most emerging market currencies, Deputy Prime Minister Ali Babacan says.
European Statistical Agency says slight decline fuelled by drop in production of durable consumer goods.
EU will use all its foreign policy instruments to establish strategic energy partnerships with producing and transit countries.
Dollar strength and waning investor confidence are driving the lira lower
Greece has already received two bailouts totalling 240 billion euros but fellow euro zone member Ireland said last week that it would have to negotiate a third programme.
The Ukraine crisis has tested the loyalties of Bulgaria, a Balkan country with historical ties to Moscow and heavily dependent on Russian energy supplies.