The business sentiment in Germany unexpectedly fell for the first time in 11 months in February in the backdrop of critical fiscal situation in some of the Euro zone countries.

Amidst the coldest winter in 14 years which has taken its toll on retail sales and construction activities, the economic outlook looks weak for some European economies.

Business climate index, based on a survey of 7,000 executives, fell to 95.2 from 95.8 in January said Ifo institute in Munich. In March last year, the index reached a 26-year low of 82.2.

According to Ifo's assessment, retailers "experienced a setback" in February and construction activity is being "constrained by the severe cold conditions." Ifo President Hans-Werner Sinn said, the German economy will recover once the winter is over.

Meanwhile, Hans-Werner Sinn said Greece is "blackmailing" its European neighbors through the euro. Hans-Werner used harsh words and argued that Greece should have never joined euro zone because they did not qualify in the first place and it is now threatening the stability of other European countries.