French Minister for the Economy and Finance Michel Sapin has dismissed a US attack on Germany’s trade surplus, but urged Europe’s biggest economy to boost its spending on investment.
In an interview promoted by the German financial daily Handelsblatt for yesterday’s edition, Sapin brushed aside US criticism that Germany exploited an “undervalued” euro to fuel its exports.
The attack “very obviously is meaningless,” Sapin said.
However, Germany “could be more ambitious” in investment spending, he said.
“We think that this would be in the interests both of Germans and the eurozone,” Sapin said.
Sapin’s words add to external pressure and to an internal debate in Germany about the country’s trade surplus, which has repeatedly broken records since the 2008 to 2009 financial crisis.
The German federal statistics office Destatis on Thursday said Germany exported 253 billion euros (US$270 billion) more than it imported last year.
Exports added 1.2 percent to top 1.2 trillion euros, while imports climbed 0.6 percent to 955 billion euros.
The European Commission and the IMF are among those who have called on Germany to boost internal consumption, which would spur sluggish growth in the EU.
However, Germany’s policy, driven by conservative Minister of Finance Wolfgang Schaeuble, is to give priority to debt reduction, followed by tax cuts in the mid-term if Chancellor Angela Merkel is re-elected in September.
The Social Democratic Party (SPD), the minority party in Germany’s governing coalition, has promised to stimulate infrastructure investment.
Germany’s major partners, including the US and France, run big deficits in bilateral trade with Berlin.
In an interview with the Financial Times published on Jan. 31, US President Donald Trump’s top trade adviser Peter Navarro accused Berlin of “[continuing] to exploit other countries in the EU as well as the US with an ‘implicit Deutsche mark’ that is grossly undervalued.”
Many economists say that Germany gains a currency advantage by being part of the eurozone. For German exporters, the euro’s exchange rate is relatively low, reflecting the weaker economies of Greece, Italy and Spain and other members.
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