Germany’s Misunderstood Trade Surplus
The ongoing debate about Germany’s current-account surplus – which has now set a new record – has been counterproductive, and is based on three common fallacies. Criticism of Germany’s export prowess, and accusations of currency manipulation, are just as wrong-headed as Germany’s own defense of its bloated surplus.
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BERLIN – Now that Germany’s current-account surplus has reached a record €270 billion ($285 billion), or close to 8.7% of GDP, the ongoing debate about its economic model has intensified. Eurozone politicians and Donald Trump’s administration in the United States are each blaming the other for the economic imbalance; and all are blaming the euro.