A new report shows that the German economy, Europe's biggest, made a good start to 2012.
The Ifo economic institute said business confidence rose for the third month in a row. Its closely watched business sentiment index beat analysts' expectations to rise to 108.3 points in January from 107.3 points in December.
"Although companies assess the current business situation as less favourable than in December, their business expectations have brightened considerably," said Ifo president Hans-Werner Sinn.
Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.
While the sub-index measuring current business declined to 116.3 points in January from 116.7 points in December, the outlook sub-index rose to 100.9 points, its highest level since July 2011.
S&P keeps ratings on top two German banks
Ratings agency Standard and Poor's has maintained its credit rating on Germany's top two banks, Deutsche Bank and Commerzbank, and removed them from the threat of an imminent downgrade.
The agency said the move followed the confirmation of Germany's top triple-A rating and its removal from "credit watch negative". However, the banks still have a negative outlook, meaning a downgrade could still occur in the medium-term.
Earlier this month, Commerzbank, Germany's second-biggest bank, said it had approved a plan that would allow it to solve its capitalisation problems without state aid. Deutsche Bank is rated A+ and Commerzbank is rated A by S&P.
