The bank for a changing world

7 days of Economics: Looking at Germany’s surpluses

  • Raymond Van Der Putten
  • Paris
  • 27.03.2017


  • Germany’s current account surpluses on the rise
  • … except with the eurozone

Germany is frequently berated by the European Commission and other international organisations for its huge current account surpluses. Last month, the US administration joined the chorus when Germany reported the surplus for 2016 at EUR 270 billion (or 8.5% of GDP), a new record.

The widening surplus is partly related to Germany’s weak public and private investment. Strengthening of the country’s infrastructure and stimulating private capital spending - through deregulation and intensifying competition in services - are among the challenges for the next German government. In purely arithmetical terms, the increase in Germany’s surplus leads to lower current account balances in other countries. 

However, contrary to popular belief, the rising surplus is not so much against the eurozone, but mainly against the US, the UK and the emerging economies including China. In particular, the surplus with France tends to narrow. At the moment Germany decided to implement a minimum wage, France implemented supply-sidemeasures. Over the last three years, Unit labour costs are rising faster in Germany than elsewhere

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