Eine Antwort auf „Germany in the pillory
Balances and imbalances in the current account

  1. Its all about the Euro and particularly the exchange rate of the euro. If Germany’s exporters really thought they could obtain a 30% price increase on their product then they would quickly hike their price accordingly. They don’t so they won’t. Therefore a euro that is 30% below the value of a D-Mark is a massive trade subsidy for German exporters.

    This is why German surpluses averaging $ 3000 billion are being racked up on an annual basis and yes it is this surplus which is then recycled (almost entirely outside Germany) as capital exports.

    The eurozone as a whole has moved from a net trade balance with the rest of the world to a 2% trade surplus. If it further mimics the German policy and obtains a 9% surplus then the world will be making an annual contribution of around $ 1.000 billion trade surplus to the eurozone. That is a figure so enormous that it will terminate global trade.
    In particular the US is once more providing the customer of last resort to global trade. If the US deficit with the eurozone approaches even $ 500 billion then tariffs will be slapped on eurozone imports to reprice the imports upwards and eradicate the capital drain.
    The adoption of Germany’s pre-modern trade policies on a eurozone scale will start a trade war.The eurozone is rich region that should optimally trade at a slight deficit with the rest of the world. It has been a net contributor to global demand (it has bought slightly more than it has sold to the rest of the world) This provides the growth to poorer regions of the world. Most importantly the eurozone is effectively a closed economy in that the overwhelming bulk of it’s output is consumed within it’s own borders. Once this stable and broadly constructive balance is changed and the eurozone becomes a hyper Germany then conflict will be inevitable.
    Nobody can export to Mars. Eurozone surpluses have to be contributed by other regions deficits. The world cannot afford to pay trade tribute to Europe

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