Business confidence in Germany improved in July after two monthly drops, as an agreement between Greece and its creditors for talks on a third bailout lifted the mood at firms in Europe's largest economy. Sonia Legg reports.
It's been the euro zone's biggest problem for several years now. But German businesses have decided to forget about Greece, according to data from 7,000 firms. (SOUNDBITE) (German) IFO ECONOMIST, KLAUS WOHLRABE, SAYING: "The Ifo's business climate index rose in July, surprisingly. One of the main reasons is the temporary easing in the Greece crisis. It was visible that companies which replied before the deal were not as optimistic as the ones which replied afterwards." Klaus Wohlrabe from the Ifo economic research institute says low oil prices are also helping. (SOUNDBITE) (German) IFO ECONOMIST, KLAUS WOHLRABE, SAYING: "We have a stable domestic economy, the consumer goods producers continue to be happy and things are going very well for them. There is also a small kind of Iran effect. The agreement shows that the mineral oil producing industry and the chemicals industry are in a much better mood." Several German companies have reported positive results in recent weeks. Auto maker Daimler's second quarter profit hit a record high. And sportswear maker Puma sold more than expected during the same period. But growth for the quarter is only expected to be 0.3 percent And there are no leaps and bounds for the rest of the euro zone, says Darren Sinden from Admiral Markets. SOUNDBITE: Darren Sinden, Market Commentator, Admiral Markets, saying (English): "We've got concerns about China now which could potentially, if it were to crash, could potentially dent German exports quite significantly. So I think there's more optimism in Germany than there was but I think in this globalised world there were plenty of problems for us all to overcome." And the Greek crisis is far from over. Bailout talks are underway but the country's future in the euro isn't yet guaranteed.