Sound bites: Germany's IFO's economic confidence dented

The March dip in Germany’s IFO index provides further evidence that the Ukraine crisis is spilling over with negative effect to hurt business confidence. Germany’s IFO, ZEW and PMI surveys are all agreed. German business sentiment is being harmed and Germany’s recovery could be put at risk the more the crisis deepens. If the Ukraine crisis escalates and tougher economic sanctions are applied against Moscow, the 6,000-plus German firms that trade with Russia will be in the firing line. The $75bn bilateral trade between Russia and Germany could be hit hard, putting a massive dent in Germany’s export growth. This is the last thing that Germany needs at the juncture when self-sustaining recovery has been looking much more credible. It will be bad news for the Eurozone as a whole, making the ECB’s recovery efforts doubly difficult.