Financial safety

Trump is right: euro has helped Germany become the China of Europe

Effectively, the euro is the German equivalent of China’s past currency manipulation that Mr Trump likes to invoke to explain America’s huge trade deficit with China. Last year Germany had a trade surplus in goods of $75bn with the US, second only to China. The euro has further strengthened Germany’s already stellar competitiveness. Without the powerful stimulus of an undervalued euro, Germany could not have become such a global manufacturing export champion, the “China” of Europe, whose exports now rival that of the US. On top of this, the Chinese-style obsession with exports has allowed Germany to export its unemployment to other parts of the EU, including the southern periphery. No wonder Germany’s unemployment rate is less that half of the EU average. The persistent large trade surplus then allowed Germany to become the EU’s biggest creditor, adding interest earnings to trade benefits. What is this if not a “made-for-Germany” EU?