THE European financial powerhouse could be facing a huge financial crisis which would have devastating implications for Britain as a lethal storm of economic problems brews in Germany.
Germany’s industrial production has slipped to ZERO per cent and customer confidence has plummeted in just part of a catalogue of disasters for Chancellor Angela Merkel.
A fall in Germany’s prosperity could drag the eurozone down with it – a scenario becoming more likely amid growing signs of the country’s slowdown.
The country has the biggest economy in Europe and is where a large portion of the bloc’s wealth is created.
Germany’s money has helped the eurozone struggle ahead, despite the ailing finances of Italy, Spain and Greece.
If the German economy crumbles it could start a domino effect that would pull down other countries’ economies with it.
That would also be a huge hit to Britain as Europe is one of the UK’s biggest trading partners.
The biggest shock facing Germany is the slowing global economy, which spells disaster for its export-driven growth.
China is one of Germany’s biggest markets, and its falling demand is expected to hit home hard.
France is one of Germany’s closest trading partners and its economy is struggling, further dampening demand for German exports.
Expert Peter Lundgreen, head of investment firm Lundgreen’s capital said: “German exporters are feeling the pain from the slowdown in business investments in many emerging market countries, as commodity prices have tumbled.”
Germany’s industrial output has helped underpin the country’s economic growth – but these numbers have been undershooting expert expectations for months.
Domestic consumption has also powered the country’s growth over the past year but consumer confidence has been falling since June last year, which indicates that consumption is set to fall too, Mr Lundgreen added.
Mr Lundgreen added: “The latest consumer confidence survey revealed that uncertainty about the job market is the biggest concern of respondents, a development that comes as a surprise.”
The investment expert tips Germany’s economic growth to slow to 1.3 per cent in 2016, falling far short of 1.8 per cent expectations.
This could knock consumer confidence even harder, he argues.
He added: “The hope for growth and market gains in 2016 is based on expectations of higher GDP growth in Germany and the eurozone – but my main scenario is less expansion than expected.”
At the same time, the economy is on course to take a hit from the Volkswagen emissions crisis, with the full impact expected to become clear in 2016.
The car manufacturer is one of the country’s largest employers, with more than 270,000 jobs in its home country and even more working for suppliers.
It is estimated one in six German jobs depends on the car industry, as well as 17.9 per cent of the country’s exports, making Germany even more vulnerable to crisis.