German exports in spotlight of US Treasury chief visit
By Simon Morgan, AFP
January 9, 2014, 12:00 am TWN
FRANKFURT--Germany's booming trade surplus, long a source of friction in Europe, was back in the spotlight on Wednesday as U.S. Treasury Secretary Jack Lew was due to meet Finance Minister Wolfgang Schaeuble.
Just ahead of the talks where Lew is expected to call on Berlin to boost demand to strengthen economic growth, new trade data showed that German exports are still growing while imports are shrinking.
Germany has come under fire on both sides of the Atlantic for its persistently high trade surplus, with critics arguing that its economic prowess comes at the expense of the eurozone's weaker members.
In October, the U.S. Treasury riled Germany by saying that it needed to tap its surpluses to boost demand and help the eurozone pull back from deflation. And similar sentiments were expressed by the EU Commission, which even announced it was putting the German surplus under scrutiny.
Ties between Berlin and Washington became frayed last year over U.S. spying on Europeans including the revelation that Chancellor Angela Merkel's mobile phone was tapped.
Germany's critics argue that Europe's top economy needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.
Long the envy of its European Union partners for its strong public finances and powerful economy, Germany runs a huge trade surplus as one of the world's top exporters with China and the United States.
But Berlin has persistently dismissed the criticism as “incomprehensible,” arguing that the high surplus reflects the competitiveness of German firms.
Data published by the federal statistics office on Wednesday showed that the trade surplus expanded in November as exports grew while imports contracted.