Here's How Volkswagen's Troubles Are Impacting The Eurozone

Just when investors thought that the eurozone was finally going to catch a break,

's

emission scandal broke, renewing worries about economic hardship on the continent. On Friday the US Environmental Protection Agency revealed that software on some of the firm's VW and Audi cars were producing inaccurate emissions tests. The scandal has wreaked havoc on the firm itself as well as VW car owners, but the problems stemming from the faulty software

.

As Volkswagen struggles to contain the issue, many are worried about the fate of Germany, the bloc's largest economy. Volkswagen operates 29 plants throughout the country and employs some 300,000 people. A major blow to such a company would have dire consequences on the German economy. A steep fall for Volkswagen could put thousands of Germans out of work and would remove a significant portion of Germany's income.

In the comping months, Volkswagen's efforts to contain the scandal will be of importance as the firm's performance in North American markets is essential to the company's, and Germany's, success. However, hefty penalties may be in order; the EPA has said the firm may be fined around $18 billion, a sum that totals more than Volkswagen's operating profit in 2014.

While the Volkswagen scandal is a threat to Germany and in turn Europe as a whole, many say fears about the scandal's impact across the continent are overdone. While its true that Volkswagen represents a significant part of Germany's GDP, the country's auto industry is also reliant on several other brands that won't feel the impact of this scandal. While Volkswagen may suffer some damage to its reputation from this incident, most believe that the overall sentiment regarding German cars as a whole won't be impacted.