BRUSSELS, July 29 - The European Commission said on Tuesday it was cautiously optimistic that the German economy would recover in the second half of this year after the Ifo business climate index rose for the third straight month in July. "The general reaction of the Commission is one of cautious optimism...to this indicator which appears to be pointing towards a recovery in economic activity in the second half in Germany," Commission spokesman Eric Mamer told reporters. "Nevertheless, the index remains moderate and of course it also showed that the economic players' analysis of the current economic situation is not particularly enthusiastic," he said. In the Ifo survey published on Monday, the index rose to 89.2 in July, its highest level in a year, from 88.8 in June, although it fell short of economists' forecasts of 89.7.