There are more signs that Germany can potentially decouple from the Eurozone's recession. The ZEW Index of business confidence (expectation of economic growth) for Germany has diverged from the same indicator for the Eurozone as a whole.
|ZEW Index: Germany (white) vs. Eurozone (orange) (Bloomberg)|
A key uncertainty for Germany continues to be China. The situation is somewhat circular (thus a bit fluid), with China's growth and consumer demand somewhat dependent on the stability of the financial system in the Eurozone and the severity of the downturn there. At the same time Germany relies quite heavily on China for its exports. The next couple of months will be quite telling if the ZEW expectation index has validity in this case.