German surplus ‘not a problem for eurozone’

Germany’s surplus does not pose a problem for other members of the eurozone, finance minister Wolfgang Schaeuble said yesterday, answering critics of its export-driven economy.

Germany’s large current account surplus of more than 7% of economic output has been criticised by economists as a source of harmful imbalances within the euro area.

ECB president Mario Draghi told the Italian parliament on Thursday “there is no doubt” that Germany’s trade surplus is harmful.

However, Schaeuble told a Bundesbank conference yesterday: “I never have accepted that the German surplus is supposed to be a problem for our partners in the eurozone.”

Germany has recently balanced its budget for the first time since 1969 and has pressed other eurozone countries to follow its austere example rather than try to stimulate their stagnant economies with borrowing.

Critics say if all eurozone countries pursue the same policies, then it will cause demand to shrink.

“Expansionary monetary policy and high leverage are not the solution but the main causes of the financial and debt crises of recent years,” Schaeuble said.