The German Trade Surplus, Bane or Boon?
AGI Non-Resident Senior Fellow
Alexander Privitera a Geoeconomics Non-Resident Senior Fellow at AGI. He is a columnist at BRINK news and professor at Marconi University. He was previously Senior Policy Advisor at the European Banking Federation and was the head of European affairs at Commerzbank AG. He focuses primarily on Germany’s European policies and their impact on relations between the United States and Europe. Previously, Mr. Privitera was the Washington-based correspondent for the leading German news channel, N24. As a journalist, over the past two decades he has been posted to Berlin, Bonn, Brussels, and Rome. Mr. Privitera was born in Rome, Italy, and holds a degree in Political Science (International Relations and Economics) from La Sapienza University in Rome.
U.S. Secretary of the Treasury Jack Lew traveled to Germany this week to promote the Obama administration’s views on what the new government in Berlin should do in order to promote growth in the European Union. In essence, Lew asked his German counterpart, Wolfgang Schäuble, to forget fiscal austerity, stimulate domestic demand and, thus, reduce Germany’s vast current account surplus.
As with other similar expeditions to Berlin undertaken by his predecessor, Timothy Geithner, Lew travels back to Washington not having accomplished much. The German government remains adamant in stressing that it is already doing the right thing for Germany and Europe. On Thursday, the President of the European Central Bank, Mario Draghi, an Italian, offered his support to Berlin saying that he never understood how weakening one country artificially would make other European countries stronger. However, he also stressed that where public investments are necessary to make the German economy more resilient, they should be made.
AGI Senior Fellow and Director of its Business & Economics Program Alexander Privitera recently published an article for the European Institute on the ongoing fight between Washington and Berlin and argues that the rift reflects a deep misunderstanding on the very nature of the recent crisis.