Germany's leading institutes have warned that the pace of economic recovery is 'unsustainable' and that the country’s banks may face a fresh crisis over the next year as bad debts surface in earnest.

'There is still a significant risk of further shocks to the international financial system,' said a joint report by the five 'Wise Men', a panel that advises the government.

Emergency action by the European Central Bank and authorities worldwide 'averted a looming collapse' of Germany’s banks over the Winter but lenders are still too frail to renew normal lending.

Daily Telegraph