European Central Bank Executive Board member Joerg Asmussen said that Germany’s export muscle is beneficial rather than harmful for the European and the global economy.
“Germany’s export performance supports both upstream producers and downstream producers in the rest of Europe,” Asmussen said at a speech in New York today. “Germany is at the center of the European value chain and is a gateway to global value chains. So it is simplistic to assume that Germany becoming less competitive would automatically help others –- it may indeed harm them.”
European regulators this month began a probe of trade surpluses in countries like Germany, the region’s largest economy, and the Netherlands, saying it could hamper a still nascent recovery in the 17-nation euro-area economy. The probe adds to criticism from the International Monetary Fund and a U.S. Treasury report that rebuked the surpluses as a drain on European and global growth.
Observers should understand that the process of restructuring and reform “has certain economic consequences –- namely a period of current account surpluses,” Asmussen said. “I see this as part of a healthy adjustment that will help the euro area to play a constructive role in global demand in the future.”
Germany’s trade surplus widened to 20.4 billion euros ($27.5 billion) in September from 13.3 billion euros the month before. The nation’s current-account surplus, a measure of all trade including services, climbed to 19.7 billion euros from 10.1 billion euros in August.
Asmussen, a German national, has been on the ECB’s executive board since January 2012. He previously was Germany’s deputy finance minister.