Friday, June 7, 2013

A Hunter is Switching His Prey

The German trade imbalances with the rest of the euro area are basically gone. The country exported commodities worth € 34.5 billion into other member states and the imports were also 34.5 billion in April according to destatis. This is mostly due to exports falling faster than imports (don't get fooled by the April numbers we had 2 work days more than last year January-April exports to euro area nations fell 2.0 % compared to last year while imports fell 0.7 %).  What probably not a lot of people had on their radar was that the overall trade imbalances of Germany not only remained unaffected, but actually increased a little compared to last year.
So, instead of preying on our neighbours (well, France is still in our crosshair -39,7 billion in 2012 don't go away in a few months) , we are now dependent on US citizens to keep on electing the kind of officials they have in this century, forever? And if the euro strengthens, are we going to see more "structural reforms" aka. beggar thy neighbour? Until the social safety net is totally gone?
We are becoming even more dependent on other countries. The gap between domestic and abroad new orders has been widening, and the lacking domestic demand should be worrying the government. It isn't though. What does one expect from a government, that wants 1.000.000 electric vehicles on German roads by 2020 and is unwilling to do anything whatsoever to make that possible.

Still, the discussion in German politics at the moment is, if increasing taxes or reducing spending is the bestest austerity (someone has to think about the next generation). Really, neither leech nor bleed guy offer an actual solution. No, both don't even understand that being utterly dependent on others buying our exports just isn't a stable system.

At least the development in the eurozone is somewhat acceptable, but I am unwilling to celebrate that German exports to those countries are falling faster than our imports.

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