Germany’s Finance Minister Blames ECB For German Trade Surplus; Why the Eurozone Will Destruct
Fireworks are going off in Germany again in yet another battle between Wolfgang Schaeuble, Germany’s finance minister, and the ECB.
Schaueble dismissed a suggestion this week by ECB head Mario Draghi that Germany should use fiscal room for manoeuvre to decrease its export surplus.
Reuters reports Germany’s Schaeuble blames ECB for German Export Surplus.
Germany has no plans to reduce its export surplus, Finance Minister Wolfgang Schaeuble said on Friday, as the European Central Bank (ECB) has not changed its monetary policy which has led to a weaker euro which in turn boosts German exports.
“Even before the European Central Bank decided its policies of unusual monetary policy, which also led to the euro exchange rate falling significantly, I said that we will increase German export surplus,” Schaueble told reporters.
“If the surplus in the euro zone as a whole rises by a total of 3.6 percent, one should not be surprised that the German export surplus has also risen, if not by 3.6 percent but by 2 percent,” he said before meeting other European finance ministers.
When asked whether he had any plans to decrease Germany’s export surplus, Schaeuble said: “I haven’t heard that the ECB is changing its monetary policy.”
The Munich-based Ifo economic institute has said Germany’s current account surplus would probably hit a new record of 278 billion euros ($313.28 billion) this year, overtaking that of China again to become the world’s largest.
Resounding No
I take that as a resounding “no” to Draghi’s proposal that Germany should reduce its export surplus.
Target2
No discussion of eurozone problems would be complete without a discussion of Target2, an abomination created by the eurozone founders and one of the fundamental flaws of the euro.
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