{"id":38891,"date":"2013-05-14T14:06:40","date_gmt":"2013-05-14T12:06:40","guid":{"rendered":"https:\/\/sg.admk-dev.de\/germanys-excessive-current-account-surplus-the-commission-must-act-now\/"},"modified":"2013-05-14T14:06:40","modified_gmt":"2013-05-14T12:06:40","slug":"germanys-excessive-current-account-surplus-the-commission-must-act-now","status":"publish","type":"post","link":"https:\/\/sven-giegold.de\/en\/germanys-excessive-current-account-surplus-the-commission-must-act-now\/","title":{"rendered":"Germany\u2019s excessive current account surplus: the Commission must act now"},"content":{"rendered":"

A recent publication by the Bundesbank on current account statistics has revised the German current account surplus considerably upwards. Germany\u2019s exports were much larger than it was assumed one year ago. The reform of the stability and growth pact (the so-called \u201csix pack\u201d) introduced a proceeding against macroeconomic imbalances. This procedure includes an early warning system composed of ten indicators.<\/p>\n

If the European Commission\u00a0detects significant\u00a0imbalances in a member state when indicators exceed a certain threshold, it can propose measures to reduce the excessive imbalance (Excessive Imbalance Procedure). In consequence the member state has to present a plan of action to get a grip on the problem. If the member state does not comply with the Commission\u2019s advice, then\u00a0financial sanctions can be imposed.<\/p>\n

Until now,\u00a0Germany managed to stay just under or marginally above the early warning system\u2019s threshold of 6 percent of GDP for current account surpluses on three years\u2019 average. Thus intensified investigation and supervision were avoided. According to the latest reports by the Bundesbank, the three years\u2019 average of the Current account surplus now yields at 6.5 percent of GDP. (1)<\/p>\n

Sven Giegold, economic and financial spokesperson for the Greens\/EFA in the European Parliament, comments the current account statistics announcement:<\/p>\n

\u201cMerkel and her government have to take full responsibility as the economic leading country of the Eurozone and\u00a0deal with the\u00a0vast German\u00a0current account surpluses. So far, the German government was able to shuffle off the responsibility because the calculations yielded values such as 5.99%. These ridiculous game around figures\u00a0has prevented Germany to tackle a serious problem in the real economy.<\/em><\/p>\n

For years, Germany realised export advantages\u00a0through a policy og strong wage restraint in comparison to other EMU member states. This kind of policy is not only unfair to employees, it does not comply with common agreements either: While in crisis-countries overran the initially agreed core inflation rate of 2 percent, the prices in Germany rose only by 1 percent. The crisis-hit countries mainly damaged themselves. In contrast Germany\u2019s policy was poison for\u00a0the\u00a0other member states whose economies has been put under significant pressure by underpriced products from Germany.<\/em><\/p>\n

Until today the German government is turning a blind eye on the fact that crisis-torn countries only have a chance of economic recovery if they\u00a0strengthen\u00a0their\u00a0export-sectors. The Commission must represent the European interest: The ambivalent manner of leaving Germany unchallenged for its export oriented policy but imposing warnings and\u00a0strict reforms\u00a0on smaller crisis-hit countries must come to an end. It is not acceptable that imbalance procedures are imposed upon countries as e.g. Slovenia with its increased private and public debt while Germany\u2019s excessive surplus remains disregarded.<\/em><\/p>\n

The Commission has to take off its blind-folds and, at least, has to follow the principle of mathematical logic: Who notices that a super-elevated share of imports by certain countries within a monetary union is harmful, must also acknowledge that super-elevated share of exports is harmful in the same way. Who imposes austerity policy measures on indebted countries, has to demand measures to reduce excessive surpluses as well.<\/em><\/p>\n

In the context of the \u201csix pack\u201d the Commission, the\u00a0Parliament and the member states have enacted a proceeding for the reduction of excessive current account surpluses. In the face of the\u00a0revised figures of the Bundesbank the commission should apply these rules strictly. Bending the rules for Germany is no solution. An imbalance procedure for Merkel\u2019s Government would highlight the problem of excessive current account balances in the political discussion. This is long-overdue: In addition to the necessary steps of fiscal debt reduction, decreasing the imbalances is a basic requirement for\u00a0every solution of the Euro-crisis.\u201d<\/em><\/p>\n

\n

(1) The Bundesbank\u2019s Current Account statistics are still\u00a0provisional. The numbers and figures will be adjusted several times and presumably\u00a0confirmed in October. The three years\u2019 average is calculated from the following figures:<\/p>\n

\n\n<\/colgroup>\n\n\n\n\n\n\n\n
<\/td>\n\n

Current account surplus (Billion \u20ac)<\/p>\n<\/td>\n

\n

GDP (Billion \u20ac)<\/p>\n<\/td>\n<\/tr>\n

\n

2010<\/p>\n<\/td>\n

\n

155,99<\/p>\n<\/td>\n

\n

2496,2<\/p>\n<\/td>\n<\/tr>\n

\n

2011<\/p>\n<\/td>\n

\n

161,2<\/p>\n<\/td>\n

\n

2592,6<\/p>\n<\/td>\n<\/tr>\n

\n

2012<\/p>\n<\/td>\n

\n

185,43<\/p>\n<\/td>\n

\n

2643,9<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

3 years\u2019 average<\/p>\n<\/td>\n

\n

6,499864%<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\n

Sources:<\/span><\/span><\/span><\/p>\n

Gross Deomestic Product: Statistisches Bundesamt: <\/span>https:\/\/www.destatis.de\/DE\/ZahlenFakten\/GesamtwirtschaftUmwelt\/VGR\/Inlandsprodukt\/Tabellen\/Gesamtwirtschaft.html<\/span><\/a><\/p>\n

Current Account Surplus: Deutsche Bundesbank:<\/span><\/span><\/span><\/p>\n

\u00a0<\/span>http:\/\/www.bundesbank.de\/Redaktion\/DE\/Downloads\/Statistiken\/Aussenwirtschaft\/Zahlungsbilanz\/sdds_zb_revisionen_2012.pdf?__blob=publicationFile<\/span><\/a><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

A recent publication by the Bundesbank on current account statistics has revised the German current account surplus considerably upwards. Germany\u2019s exports were much larger than it was assumed one year ago. The reform of the stability and growth pact (the so-called \u201csix pack\u201d) introduced a proceeding against macroeconomic imbalances. This procedure includes an early warning […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[],"class_list":["post-38891","post","type-post","status-publish","format-standard","hentry"],"acf":[],"yoast_head":"\nGermany\u2019s excessive current account surplus: the Commission must act now - Sven Giegold<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sven-giegold.de\/en\/germanys-excessive-current-account-surplus-the-commission-must-act-now\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Germany\u2019s excessive current account surplus: the Commission must act now - Sven Giegold\" \/>\n<meta property=\"og:description\" content=\"A recent publication by the Bundesbank on current account statistics has revised the German current account surplus considerably upwards. 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