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Here some data straight from the mouth of Hell:

http://www.bundesbank.de/download/volkswirtschaft/zahlungsbilanzstatistik/2011/zahlungsbilanzstatist ik052011.pdf

In the year 2010 Germany had a trade surplus with the EWU-Länder (17) that is the Eurozone numbering + 76.129 Billion €. And a current account surplus with the same countries at + 73. 379 billion €.

large surplusses with France, Austria, Italy, Spain and Belgium. A small one with Finland. Small deficit with Slovenia. Bit trade deficits with the Netherlands and Ireland.

My conclusion: Germany should leave the Euro at once, to devalue vis-a- vis Ireland and the Netherlands

by IM on Mon Jun 6th, 2011 at 07:11:05 AM EST
My conclusion: Germany should leave the Euro at once, to devalue vis-a- vis Ireland and the Netherlands

I realise that this is tongue in cheek, but you cannot quite conclude that.

If the Netherlands and Ireland have a trade deficit against Spain, Austria, Italy, France or Belgium, you would have to net out those transactions before concluding that Ireland and the Netherlands should permit their currencies to appreciate.

You should also look at the balance sheets involved - surpluses are not necessarily destabilising if they go towards paying down foreign debt. The problem is that surpluses rarely end when the country goes from being a net debtor to a net creditor, which is the point where the surpluses start becoming Ponzi-like if not contained.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jun 6th, 2011 at 01:58:33 PM EST
[ Parent ]
In a financialized economy it seems that trade surpluses almost always turn into asset bubbles -- somewhere. In the 70s Saudi surplus "petrodollars" were "recycled" through US banks, such as Citi, who then loaned them to Argentina, etc., leading to "The Latin American Debt Crisis": Saudi surpluses through US banks to Latin American bubbles.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 8th, 2011 at 04:26:51 PM EST
[ Parent ]
Not necessarily.

If a country's primary trade deficit is less than the difference between its sustainable growth rate and the interest it pays on its foreign debt, the foreign debt will converge to a stable level.

But you don't hear so much about those cases, because they don't make headlines by going boom every ten years.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jun 8th, 2011 at 06:32:01 PM EST
[ Parent ]

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