Germany announced on Thursday a record annual trade surplus with exports to a level not seen, which could bring water to the mill of critics of the economic policies of Angela Merkel, that of Donald Trump being in first place .
Europe’s largest economy in 2016 has exported 252.9 billion euros more than it imported, said the Federal Statistics Office. This is more than in 2015, when the balance had stood at 244.3 billion euros. Since the financial crisis of 2008-2009, this figure has been increasing.
Germany also importing more and more (+ 0.6% to 954.6 billion euros), buying abroad such as agricultural products, natural gas, clothes or computer devices. But success outside its borders of “Made in Germany” include machine tools, chemicals and especially cars is even greater, since exports increased 1.2% to 1 207.5 billion euros, also a level not seen before.
“The record trade surplus will fuel the conflict with the United States and the European Union” which regularly accuse Germany to take advantage of other countries by selling its products there without back doing enough to boost its domestic consumption, which could benefit them, judge economist Marcel Fratzscher, the DIW institute.
In his eyes there is this new record “no reason to be proud” . The surpluses of Germany often constituting deficits of its main partners.
Germany remains far ahead of countries like Brazil, which recorded a record trade surplus also in 2016 of 47.7 billion, or Japan, which posted its first trade surplus since 2010, of more than 33 Billions of Euro’s.
That of China has certainly declined, but remains at $ 510 billion. France has however widened its trade deficit to 48.1 billion euros.
Fond of German cars, the US, supplanting last few years in France as a trading partner Germany, have they increased their trade deficit at 502.2 billion dollars.
This is where the rub for the new president Donald Trump party in a campaign to bring back jobs and production on the American soil.
Too weak imports
His administration has Germany in the crosshairs. In late January, one of Donald Trump’s advisers, Peter Navarro, accused Berlin of “exploiting” other countries of the European Union and the United States with a euro “grossly undervalued,” making its products artificially competitive .
Chancellor Angela Merkel has rejected this criticism, reminding have no influence on the monetary policy of the European Central Bank prepared for the entire euro area. The Finance Minister Wolfgang Schäuble has even said “not a big fan” of the current policy of the ECB, which crops the savings of the Germans by very low rates.
If the load Donald Trump is more brutal, the criticism of German surpluses are not new.
Before him, Barack Obama, the International Monetary Fund (IMF), the European Commission and countries like France have criticized the German trade surplus, claiming to use this windfall of money to invest in return.
More than the importance of exports, Marcel Fratzscher advanced as the source of the problem rather “weak import growth, resulting from a big lack of investment” , which has “a high economic cost for Germany” , including reducing productivity, while conversely, higher investments “would benefit European neighbors” .
The issue of lack of investment in an aging country, is a source of regular controversy in Germany itself. The conservative Merkel stressed the importance of not creating new debt, while the Social Democrats are demanding to use budget surpluses to build infrastructure. This will be an important issue for the parliamentary elections in September.
The German government, strong tax revenues rising and lightening the debt burden thanks to low interest rates, has nonetheless significantly increased its spending in recent years, to finance the reception of refugees in particular .