Germany’s Bundesbank joined members of the government, think tanks, and business analysts to warn that Europe’s largest economy may be headed towards a recession after suffering through a period of negative growth throughout the summer.

The Bundesbank said industrial production has slowed considerably as a result of the ongoing Sino-American trade war and continued concerns about the long-term effects of a potential no-deal Brexit. According to Deutsche Bank’s Chief Economist Stefan Schneider, the situation is particularly dire for the automotive and chemical industries.

Finance Minister Olaf Scholz has warned that Germany could “fully face up to” a new economic crisis, adding that he is considering a €50 billion stimulus package that more or less resembles the government’s response to the global financial crisis a decade ago.

Germany’s overall debt-to-GDP ratio is expected to fall below the EU’s crucial 60% threshold this year, providing further political justification for fiscal expansion in 2020.

Approximately €12.3 trillion worth of bonds in the world market is currently offering negative yields. The German government on 20 August announced that it is auctioning a 30-year bond maturing in August 2050 with 0% interest. The zero-coupon bond provides security at a moment in time when the European Central Bank is offering negative interest rates. This means that investors have to pay for the security of holding reserves.

The European Central Bank’s deposit rates are expected to slide further into negative territory in September which would put Germany, the world’s fourth-largest economy, in a position to develop a massive stimulus package at minimum cost as bond yields are falling across Europe.

The UK, France, Spain and Italy are all planning their own stimulus packages that are likely to anger Brussels as they will exceed the EU’s threshold for debt-to-GDP.