In 2015, Germany recorded a current account surplus of €248 billion, second only to China. This surplus is clearly a burden on the global economy, and an indication of massive domestic macroeconomic imbalances.
A surplus in the current account means that Germany exports more goods and services than it imports. This increases its net foreign assets and can only function if foreign households, businesses and governments borrow from Germany or sell assets to Germany. A certain level of foreign debt, for example to fund investment, is not a problem. But many trading partners now in fact have large and growing foreign borrowings. Debt crises loom.
And ultimately debt crises abroad also have negative consequences for Germany. Parts of the capital are lost, such as German banks’ investments in the U.S. subprime mortgage market in 2008/2009. This loss of capital is all the more tragic, considering that Germany suffers a backlog itself, and many investments, for example in infrastructure, would certainly bear positive returns. The capital could be put to better use at home.
Let me be clear: Germany’s exports are not the problem. They reflect the competitiveness of German products and the success of the modern division of labour. But an economy with a sustained high level of exports must also import accordingly, both in its own interests and for the sake of global stability.