German investor confidence plummeted in June, sustaining its steepest fall in nearly 14 years, amid concerns over the health of Spain's banking system.
The ZEW think tank's economic expectations index plunged 27.7 points to -16.9 points, "the steepest fall since October 1998," the group said.
"The escalation of the situation in the Spanish banking sector contributed to the sharp drop in the indicator," ZEW president Wolfgang Franz explained.
The poll was also carried out before the outcome was known of the Greek elections at the weekend, he pointed out.
"Analysts' expectations offer a stern warning against an over-optimistic assessment of Germany's economic outlook this year," Franz said.
There were unmistakable risks of a sharp economic downturn in Germany's key trading partners. "In addition, there is the precarious situation in the euro area. The outcome of the Greek vote offers a short breathing space, but nothing more and nothing less," the ZEW chief said.
