Germany: Berlin still selling too much

14 August 2012 – Presseurop Der Standard, Financial Times Deutschland, Financial Times Deutschland, Frankfurter Allgemeine Zeitung

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Notwithstanding the recent warnings voiced by experts of a recession in September, the more immediate problem appears to be the German trade surplus, which, as the Der Standard headline points out, “is worrying the OECD.” This year, the organisation predicts that the value of German exports will exceed the value of its imports by €200 billion — the equivalent of 6 per cent of GDP. However, the news concerning this figure, which is even better than the results posted by China and Japan, is not all positive. As Financial Times Deutschland reports, Berlin is contributing to the economic imbalances on the European continent and could be called to order by the European Commission.

In February, Brussels glossed over Germany’s sins by raising the threshold for an excessive trade surplus alert to 6 per cent of GDP. However, this will not be the case this time around, argues FTD, which predicts that the EU will recommend that Germany invests in its services sector so as to relaunch consumption and reduce the gap between imports and exports.

Outraged by the criticism of the German economy, Frankfurter Allgemeine Zeitung dismisses the debate on “so-called imbalances” in which “surpluses and deficits are thought to be equally problematic” —

Countries that constantly record trade deficits and build up debt abroad cannot expect to see improvement. This is how the periphery of the Eurozone became mired in crisis — with a trade deficit that highlighted its lack of competitiveness. The German surplus, however, is a reflection of the strength and structure of a German economy which produces goods that are needed elsewhere. This should not be a concern.

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