If you listen to German politicians or economic leaders these days, Germany is being unjustly savaged in Europe for its export surplus. These German leaders largely argue the same thing: Germany is being punished for its success! Germany's performance must be rewarded!
But now -- in a move that was foreseen for some time-- the European Commission announced on Wednesday that it will put Germany's export surplus under the microscope. While the politicians have griped, Germany's export surplus has skyrocketed to around 6 percent of gross domestic product. In September alone, German exports exceeded imports by more than €20 billion. If the commission's investigation should decide the surplus is "excessive," then, in theory at least, Germany could be facing a fine of up to 0.1 percent of its economic output, more than €2.5 billion. According to experts in Brussels, it's unlikely things will come to that. In their anger, the German whiners are forgetting one small thing: They themselves were responsible for the rules designed to keep high export surpluses under control. This provision -- along with targets for deficits, national debts or inflation -- are part of the colorful bouquet of criteria which are supposed to finally make the euro zone macro-economically stable. Of course, German officials only agreed to this condition to prevent even more stringent regulations on export control. And yet in doing so, Berlin clearly recognized the principle that high budget surpluses, just like massive deficits, can lead to economic distortions. This principle has gained new relevance in the euro crisis, because many economists consider higher domestic demand and less exports in Germany an urgent necessity for the stimulation of growth in crisis states.
The real issue here is about rules and their application. The German government has emphasized at every opportunity that the euro zone must be a community of laws. It has admonished crisis states that have complained about overly rigid limits for budget deficits because, after all, they had agreed to the rules. But when it comes to Germany, apparently different standards apply. It's similar to how the Schröder government saw the country become one of the first EU member states to violate the Maastricht criteria -- the fiscal criteria which establish whether a country is allowed to enter the euro -- in 2003, when it implemented its Agenda 2010 social reforms.
If Germany once again displays a double standard, it will lose the credibility which is a nation's most important currency in these times of crisis. It should also not be surprised that the ambassador of a southern EU state angrily declared on Tuesday that German supremacy within the EU can only exist if "the same rules apply for all." Europe can afford such discord among partners even less than overly high deficits or surpluses. All which means: It's time the Germans quit their moaning.
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