German business confidence was up for a second consecutive month in May, with many forecasting the country's worst economic contraction since the end of WW2 will slow by the end of the year.

The health of the German economy is vital for the return to health of many CEE neighbours.

The Ifo institute in Munich said its business climate index, which is a survey of 7,000 business leaders, increased to 84.2 from 83.7 in April. The index was at a 26-year low of 82.2 in March.

Germany has launched an €82 billion spending plan to counter the downturn, which has savaged exports that power the German economy.

The government expects the economy to shrink by 6 percent this year.