Germany divided into multiple states post WWII: Effect on Europe's economy?

[Odinson]

Germany is one of the biggest economies in western Europe, a bedrock of the EU. If Germany stumbles a bit, at least a few countries trip and fall down.

How would the European economy look during the 20th century and beyond if at the end of world war two Germany was broken up into a series of states as opposed to just two?

Let's say the allies really don't want to allow Germany to reunite as its seen as too big a threat, like Germany had deployed a nuclear device before the end of the war.

 

[Odinson]

Would the permanent/greater division of Germany really have much of an effect?

 

[mial42]

The answer is... it depends. If all the German statelets are in a customs union with each other and are both stable and have friendly relations and economic integration with the rest of Western Europe like those of OTL West Germany, the effects would probably be minimal. If, on the other hand, the statelets erect trade barriers with each other, have significantly different regulatory regimes, have unstable governments, and spurn economic cooperation with each other or the Western Europe, then Europe as a whole would be a lot poorer. Both are plausible, although IMO scenario one is more likely, since the occupying allies are going to prefer a friendly *Germany integrated into the European order over a fractured and hostile one for the same reasons as OTL, and have the power to (mostly) enforce this, even if, for security reasons, *Germany is split into smaller states.