German business morale improved more than expected in May and consumers are also upbeat. As Hayley Platt reports, the surveys suggest Europe's biggest economy will extend its surprisingly strong start to the year into the second quarter.
It was Greece not Germany making the front pages in the euro zone. But it's hard to mention one without the other. Greece may not like it but Germany matters. And it's generally good news for the whole bloc when the engine's running smoothly. (SOUNDBITE) (English) FIDELITY WORLDWIDE INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "Germany has improved on really all areas of the economy, so wholesale and retail and manufacturing and distribution as well. So it's firing on all cylinders." Germans are feeling good. Consumer sentiment was up heading into June. And business morale improved more than expected in May, according to surveys from IFO and GFK. (SOUNDBITE) (German) GFK EXPERT, ROLF BUERKL, SAYING: "The jobs market and wages are positive - we've had relatively good trade agreements and real income increases and that, combined with almost non-existent inflation, provides for a good spending mood." In fact, their willingness to buy was at a 12 month high. And Germany's still making products the world wants. (SOUNDBITE) (English) FIDELITY WORLDWIDE INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "We may have low overall demand in the world but Germany is doing the right thing. Around the periphery we still have deep-seated problems. We've seen improvements in Spain and of course Ireland, that's good, but in some of the other countries, Greece and Italy in particular, are laggards." So it's back to Greece. They're no longer threatening to bring down the euro zone. But they may be looking at Germany with green eyes - as the economic gulf between them grows even wider.