German trade surplus rises in November
Frankfurt (AFP) - Germany's booming trade surplus, long a source of friction in Europe, was back in the spotlight on Wednesday as US Treasury Secretary Jack Lew was due to meet Finance Minister Wolfgang Schaeuble.
Just ahead of the talks where Lew is expected to call on Berlin to boost demand to strengthen economic growth, new trade data showed that German exports are still growing while imports are shrinking.
Germany has come under fire on both sides of the Atlantic for its persistently high trade surplus, with critics arguing that its economic prowess comes at the expense of the eurozone's weaker members.
In October, the US Treasury riled Germany by saying that it needed to tap its surpluses to boost demand and help the eurozone pull back from deflation. And similar sentiments were expressed by the EU Commission, which even announced it was putting the German surplus under scrutiny.
Ties between Berlin and Washington became frayed last year over US spying on Europeans including the revelation that Chancellor Angela Merkel's mobile phone was tapped.
Germany's critics argue that Europe's top economy needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.
Long the envy of its European Union partners for its strong public finances and powerful economy, Germany runs a huge trade surplus as one of the world's top exporters with China and the United States.
But Berlin has persistently dismissed the criticism as "incomprehensible", arguing that the high surplus reflects the competitiveness of German firms.
Data published by the federal statistics office on Wednesday showed that the trade surplus expanded in November as exports grew while imports contracted.
In seasonally adjusted terms, Germany exported goods worth 93.2 billion euros ($127 billion) in November, up from 92.9 billion euros in October, Destatis calculated.
Imports, on the other hand, declined by 1.1 percent to 75.4 billion euros from 76.2 billion euros.
In regional terms, exports to the 18-member euro area inched up by 0.1 percent on a 12-months basis in November, while imports from that region contracted by 1.0 percent.
Similarly, exports to the European Union as a whole were up 1.8 percent, but imports from the EU stagnated.
And exports to the rest of the world were unchanged while imports from the rest of the world were down 1.0 percent.
More pressure on Germany likely
Analysts said the data will likely put Germany back in the hot seat.
"Clearly, these figures should bring again those back onto the scene who urge Germany to do more to help rebalancing the eurozone," said Natixis economist Johannes Gareis.
Chris Williamson at Markit in London agreed.
"The widening surplus is likely to put increasing political pressure on Germany to rebalance its economy away from export-oriented growth towards domestic consumption," he said.
The rise in the surplus was the biggest since comparable data were available in 1990, Williamson noted.
The argument is that other eurozone member states hope that will help fuel faster export-driven growth in their own economies.
"However, the flip-side is that stronger German export gains, especially to non-euro countries, helps boost business activity at companies within the euro area that are suppliers to German firms," Williamson argued.
Berlin has consistently countered that making its strong economy weak will not automatically strengthen the weaker members of the single currency area.
Indeed, Germany's fundamental strength benefits the euro area as a whole, said BayernLB economist Stefan Kipar.
The data "fuel hope that the flow of goods in the area will gather strength as the crisis countries recover," he said.
Newedge Strategy analyst Annalisa Piazza believed imports will "continue on a modest positive trend over the next few months as German domestic demand remains well supported by the recent positive momentum, due to the stabilization of the labour market and rising business confidence."
