Germany has been facing tough times for awhile. With parts of the country facing 25% unemployment and 12% nationally, Gerhard Schröder's recently changed economic policies similar to George Bush's, cutting taxes and increasing spending. Consumer confidence has increased since, but it hasn't spurred growth and for the most part they are putting the blame at the feet of the high price of oil. Some Germans are so fed up that 20% of Germans want the Berlin wall back. On top of all of this is the planned US pullout of troops from the region, which is responsible for a lot of jobs and support businesses as well as revenue in the country.

New York Times

Six influential German economic institutes have cut their growth forecast for this year in half, prompting a new rash of fears that the German economy is on the brink of recession.

After four years of lackluster growth, the downward revision - to 0.7 percent from 1.5 percent - illustrates that economic forecasting in Germany has become mostly an exercise in finding ever-more-precise ways to measure stagnation, economists say.

In their semiannual report on the German economy, submitted Tuesday, the six institutes said: "Almost no other country in the European Union has had a development in recent years that was so unfavorable. Obviously, the German economy is suffering from fundamental weakness."

Given such weak underpinnings, economists said it was quite possible that the German economy, Europe's largest and an engine for much of the Continent, could fall into a recession - classically defined as two consecutive quarters of contraction.

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