Macroeconomics is weird

The European Commission has warned Germany it could face disciplinary action for running excess trade surpluses at the expense of EU partners,

Eh?

Masking lots of things that foreigners willingly hand over the cash for is at the expense of foreigners?

What?

12 comments on “Macroeconomics is weird

  1. Well, it’s not macro-economics, is it? It is politics. Therefore, while ganging up on one of the crowd is nasty, it is hardly ‘weird’.

    More interestingly, it is a Eurozone thing, as opposed to a wider EU thing (okay, you don’t need to be in the Eurozone to sign up to the Fiscal Compact but you aren’t bound by the fiscal provisions unless you are.)

    So, what you actually have here, if you do want to bring macro in to it, is (yet more) direct evidence for your regular non-optimal currency area.

    Which makes more sense?

  2. Current account = Savings – Investment

    So it’s not that they make lots of stuff that others want. So does the UK. It’s that there’s an imbalance between exports and imports.

    Switch it on its head, the rest of Europe is making lots of financial obligations that Germany willingly hand over the goods for. Is that really at the expense of Germany?

  3. Its not that they make things that people want that is being protested about ,the economic accusation is that low price is contrived. I don’t know what the evidence is . As simillar charge was made about China.

  4. Funnily enough this is miles away from the original aims of the single currency helping trade. And it was predicted.

    Currency fluctations are being replaced with politics here.

  5. Was it only a decade ago all the clever people were telling us we’d need to join the Euro or become an impoverished backwater?

    It would take a heart of stone not to laugh.

  6. Dinero

    There is no evidence. SE said it all: politics, pure and simple.

    At least there was some indication that China’s exchange rate was being artificially lowered. In the case of Germany, it has made exactly the sort of efficiency gains envisaged by the Eurozone’s designers (German). So now following the rules is sabotage.

  7. Dinero
    German currency is a zeppelin which would float into the stratosphere before bursting into flames, were it not tethered to the stone cold basket case of club med. German business doesn’t much like trying to sell stuff to people who are broke, but they sure like a nicely undervalued currency for selling stuff to people who aren’t .

  8. The French and club med thought they were being so clever tying the Germans in to the Euro. They were all going to live high on the hog on the back of Germany.

    It what all those damn fools said would happen, again.

  9. BiF is correct here, funnily enough. The EZ is a cunning scheme for Germany (which has always been the very definition of mercantilism) to maximise its mercantilism.

    This doesn’t particularly benefit the German people, because of all the It’s Nice To Have Stuff For Free And Rubbish To Give Stuff Away For Free reasons that Tim has stated here forever, but it does benefit the German elites and the glory of Germany.

  10. Excellent, the EU is looking to get into a fight with the Germans. Bring it on. I think they’ll find they can’t play the war guilt card any more.

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