France’s Economy Minister Michel Sapin has dismissed a US attack on Germany’s trade surplus but urged Europe’s biggest economy to boost its spending on investment.
In an interview trailed by the financial daily Handelsblatt for its Monday edition (13 February), Sapin brushed aside US criticism that Germany exploited an “undervalued” euro to fuel its exports.
The attack “very obviously is meaningless”, said Sapin.
But, he added, Germany “could be more ambitious” in investment spending.
“We think that this would be in the interests both of Germans and the eurozone,” said Sapin, who also holds the French finance portfolio.
Sapin’s words add to external pressure and to an internal debate in Germany about the country’s trade surplus, which has repeatedly broken records since the 2008-9 financial crisis.
Last Thursday, the federal statistics office Destatis said Germany exported €253 billion more than it imported in 2016. Exports added 1.2% to top €1.2tr, while imports climbed 0.6% to €955bn.
The European Commission and the International Monetary Fund (IMF) are among those who have called on Germany to boost internal consumption, which would spur sluggish growth in the EU.
But Germany’s policy, driven by the conservative finance minister, Wolfgang Schäuble, is to give priority to debt reduction, followed by tax cuts in the mid-term if Chancellor Angela Merkel is re-elected in September.
The Social Democratic Party (SPD), the minority party in the governing coalition, has promised to stimulate infrastructure investment.
Germany’s major partners, including the United States and France, run big deficits in bilateral trade with Berlin.
On 31 January, in an interview with the Financial Times, US President Donald Trump’s top trade adviser Peter Navarro accused Berlin of “(continuing) to exploit other countries in the EU as well as the US with an ‘implicit Deutsche mark’ that is grossly undervalued”.
Many economists say that Germany gains a currency advantage by being part of the eurozone.
For German exporters, the euro’s exchange rate is relatively low, reflecting the weaker economies of Greece, Italy and Spain and other fellow members.