German exports under fire

Germany may soon be the subject of a special investigation of the European Commission owing to its current account surplus. This indicator, which reflects the balance of trade of a country, must not exceed 6 per cent of GDP. Since 2007, however, Germany’s current accounts have been constantly in excess of that figure and the European Commissioner for Economic and Monetary Affairs, Olli Rehn, believes they could represent 7 per cent of GDP in 2013 and 6.6 per cent in 2014, writes Die Welt —

Criticised vigorously by the American Treasury Department, which recently castigated Germany for causing a "deflationary distortion" in the eurozone through its excessively lopsided trade balance, it is now the turn of "the EU to rail against the strength of German exports", notes the daily —

Rehn is demanding that Germany strengthen domestic consumption. This means that Berlin should invest more money in infrastructure, lower taxes, raise wages in the low-income sector, and liberalise the service sector. These demands have been around for many years, but according to the European Commission, Berlin has not worked hard enough.

For its part, Frankfurter Allgemeine Zeitung notes that "critics of the German trade surplus criticise Germany for obtaining competitive advantages by keeping wages low, which is driving businesses in other states out of the market."