The government of Germany is confident the economy will return to full employment soon and investment is booming.
Economy minister Rainer Bruederle said that Germans were "doing well and spending again" and that domestic consumption was strong.
Data issued this week showed German business confidence at a 20-year high.
The BBC reports German optimism is in marked contrast with the gloom engulfing some European economies struggling with high debts.
The euro has fallen by more than three cents against the dollar this week on fears that the Irish debt crisis may spread to other European countries with high budget deficits, such as Portugal and Spain.
The Irish Republic is negotiating with the European Union and the International Monetary Fund over a rescue package expected to be worth about 85 billion euros ($US113 billion).
Despite the fact that many Germans are unhappy they will be contributing the bulk of the bail-out, Mr Bruederle said confidence had returned following the global recession.
"Germans are in an expansionary mood. We're investing again, we're consuming again, people are doing well and people are spending again," he said.
He added that domestic demand was now contributing more than half of the country's economic growth, with predictions of "90% of growth" from the domestic economy next year.
Job market in good health
Mr Bruederle also said the German job market was in good health.
"There are fewer than three million unemployed now, down from five million. Even the number of long-term unemployed is now decreasing, which has never happened in the past," he said.
"I'm convinced that full employment will soon be possible."
The BBC reports the German economy grew by 0.7% between July and September compared with the eurozone average of 0.4%. This followed record growth of 2.3% in the previous three months.