German economy to slow sharply next year: panel
The eurozone debt crisis looks set to slam the brakes on growth next year in the German economy, Europe's biggest, a panel of economic advisors to the German government said on Wednesday.
The so-called "Five Wise Men and Women" predict that gross domestic product (GDP) growth will slow to just 0.9 percent next year from an anticipated 3.0 percent in 2011 in their latest updated forecasts.
"Growth looks set to remain at a strong 3.0 percent in 2011. But the economy will weaken sharply in 2012 as the rebound comes to an end and the global economic environment deteriorates," the experts wrote.
"The risks increased further in the autumn. The eurozone is caught in a vicious cycle of debt crisis and banking crisis," they said.
The forecasts are in line with the government's own projections, according to which growth will slow from 2.9 percent this year to 1.0 percent next year.
In their report, the experts said shutting Greece out of the euro "is not a solution" to the crisis.
They also saw as "problematic" solutions involving the issue of eurobonds or joint sovereign debt, or the greater involvement of the European Central Bank.
© 2011 AFP