Some have pointed out that much of Germany’s trade surplus is with countries outside the euro zone. That observation is largely irrelevant to my argument. The German surplus still likely displaces other euro zone exports to third countries, both directly and by leading to a euro that is stronger than it would be otherwise. Moreover, weak domestic demand in Germany means less demand for imports as well.
Is the German Trade surplus a problem for the Eurozone?
Open Europe's Raoul Ruparel examines whether the German trade surplus is as big a problem for the Eurozone as is often made out.
Some have pointed out that much of Germany’s trade surplus is with countries outside the euro zone. That observation is largely irrelevant to my argument. The German surplus still likely displaces other euro zone exports to third countries, both directly and by leading to a euro that is stronger than it would be otherwise. Moreover, weak domestic demand in Germany means less demand for imports as well.
Some have pointed out that much of Germany’s trade surplus is with countries outside the euro zone. That observation is largely irrelevant to my argument. The German surplus still likely displaces other euro zone exports to third countries, both directly and by leading to a euro that is stronger than it would be otherwise. Moreover, weak domestic demand in Germany means less demand for imports as well.