Unclear how deep and lasting Germany's economic problems are: ECB's Nowotny

VIENNA (Reuters) - It is unclear if Germany's recent economic setbacks are a one-off or a more lasting phenomenon caused by structural problems, particularly in its car industry, European Central Bank policymaker Ewald Nowotny said in remarks published on Saturday.

Struggling to adjust to new emission testing standards, Germany's car manufacturing contracted in the third quarter, dragging overall economic growth into negative territory and raising fears that Europe's five-year-old growth run may be coming to a premature end.

The Bundesbank said in a monthly economic report last month that Germany's dominant car industry may take longer than previously thought to recover from a slump, weighing on growth in the euro zone's biggest economy.

"The most important economic question for Europe is whether these are one-off slowdowns or whether structural factors are behind them," ECB's Governing Council member Nowotny said in an interview with Austrian newspaper Der Standard, discussing the prospect of a second quarter of negative growth in Germany.

"The fear is that particularly in the auto industry we have lasting changes that affect Germany especially," said Nowotny, who is also governor of the Austrian National Bank.

The Bundesbank said in its report last month that while a quick rebound in the auto sector had been forecast, fresh data was disappointing those hopes.

It added that the slump was exacerbated by an overall deterioration in sentiment as well as uncertainty over the future of diesel cars as cities contemplate bans to reduce pollution.

"What I find particularly unsettling are psychological factors. The whole diesel discussion, combined with the problems in the auto industry, increases uncertainty," Nowotny said.

"If people defer the purchase of a car by just half a year, that causes a vast fall in demand. There would be lasting and dramatic consequences if there were real structural collapses in the export- and machinery-oriented economy. Germany could become vulnerable," he said.

(Reporting by Francois Murphy, Editing by William Maclean)