The German auto industry accounts for around 15% of its manufacturing activity, 3% of its GDP, and 2.5% of its employment. For an economy that grew by less than 1% last year, it's pretty easy to see that it won't take much disruption of the auto industry to throw Germany back into a technical recession.
And a government facing a domestic recession and falling tax revenue wouldn't be in the same position to help its neighbors as one enjoying growth and rising tax receipts.
Given Germany's financial muscle, the potential domino effect is obvious. In particular, already-poor countries like Spain and Italy will find it hard to finance deficits without the prospect of a German-led bailout or other agreement.
And with the prospect of Europe in recession and China slowing, the U.S. economy suddenly becomes vulnerable, too.