German consumer morale drops

The consumer confidence survey, which was published on Wednesday, found that jitters over Greece are still weighing on Germans' views of their national economy.

In fact, consumers' outlook for Germany declined sharply in July over fears that the Greek debt crisis would continue unabated in the coming months.

"The long and difficult struggle to resolve the debt crisis in Greece has kept the country from default for now," market research company GfK said in its report. "However, this has not allowed German consumers' expectations to take flight but rather led the indicator to fall for the second time in a row."

GfK found that Germans expect economic growth to continue in the coming months but not with the same strength anticipated just weeks ago.

"Citizens apparently assume that the hard-fought agreement in the debt crisis with Greece will have a negative impact on the German economy," GfK said. It also cited conflicts in Ukraine and the Middle East as negative factors.

Upbeat about their own earnings

Yet despite the plunge in confidence over the economy, Germans' attitude toward their own personal finance has not been shaken.

"Consumers willingness to spend is unchanged," said Rolf Bürkl of GfK.

A recent report by Germany's central bank, the Bundesbank, suggested that Germans are wealthier than ever before, having amassed a record amount of financial assets. 18595491

In addition, Germans are particularly upbeat about their own earnings prospects, according to the latest figures. That sentiment reached its highest level since reunification in 1990, the survey found, bolstered by a strong labor market and advantageous sector-wide wage accords.

Between January and March, real wages in Germany have increased by 2.5 percent, the highest rise since 2008.

For its surveys, GfK asks around 2,000 people in Germany about their expectations for spending, personal income and the general economy.

Slight decline in France

The findings indicated that German consumers were less optimistic about the economy than companies, after a survey of business confidence published Monday by the Ifo economic institute showed a slight increase in July.

But while consumer sentiment as a whole remains steady in Germany, a similar indicator declined slightly in France, according to figures published by the national statistics office Insee in Paris.

The French economy has been struggling with rising unemployment. In June, the number of unemployed people rose to 3.55 million, a new record. When French President Francois Hollande was elected three years ago in May, only 2.89 million people were registered as out of work.

Hollande has long pledged to run for a second term in office only if unemployment falls. On Monday, he upped the stakes and said falling unemployment rates would have to be sustained throughout next year before he would consider a bid for re-election in May 2017.

bea/cjc (AFP, dpa, Reuters)