Germany may be spluttering as EU's engine of recovery

THE eurozone has had a tough year so far. Just months ago, the global community watched with bated breath as it went back and forth between a Greek bailout and Grexit. While the spotlight has been on Greece, look beyond that and there is still a long line of European Union countries struggling with national debt. Portugal, Italy, Ireland and Spain have some ways to go before they can make good on the ballooned amounts of debt racked up over the years.

Even France, normally considered a pillar of strength, is treading on shaky ground. French Finance Minister in September's Budget statement said that France's debt levels are likely to escalate further from 96.3 per cent in 2015 to 96.5 per cent of gross domestic product in 2016.

Amid the backdrop of economic gloom, the lone bright spot has been Germany. The nation with a reputation for engineering excellence has long been held as a beacon of financial stability. However, recent events have seen its impregnable exterior marred by scandal. On Sept 3, Volkswagen admitted to deceptive practices in hiding emission levels in its diesel engines. With 11 million cars or so thought to be involved in the scandal, Volkswagen faces losses estimated at £11.6 billion (S$24.8 billion). The dent in consumer confidence in Germany's carmakers could see ripple effects larger still.