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If they had set a 4% CA surplus limit, Germany would have been instantly in violation of it. As I say in the article, the data show a remarkably stable current account surplus, averaging over 5.9% over the past 8 years. So, when policymakers sit down to write down the thresholds, of course a German surplus of 6% is "the new normal".

Tweaking the Current Account surplus directly is exceedingly hard. The only way seems to be direct transfers, for instance having Germany just give an extra 2% of its GDP to the EU's structural funds (yeah, right!).

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Tue Aug 28th, 2012 at 04:34:06 AM EST
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