Germany

Since I did the numbers for the US, I thought I would do the numbers for Germany too. Below are the bilateral trade figures for Germany in 2010, first ranked by deficit with country and then by surplus with country. Germany has a deficit…

The “solution” currently on offer – i.e. the talk surrounding the European Financial Stability Fund (EFSF) now includes suggestions of ECB backing. This makes eminent sense. Let’s be honest: the EFSF is a political fig-leaf. If 440…

Dollar is paring back its overnight gains as Germany ratifies changes to EFSF; European banks higher. Ratification of the EFSF sets the tone for a shift in the political agenda; Q2 US GDP expected higher. Brazil’s August wholesale IGP-M…

Former ECB chief economist Otmar Issing recently spoke to German weekly Stern in an interview now published online. His view is that the appropriate strategy for dealing with Greece is to force a hard restructuring and a large writedown of…

I want to talk a little about the political economy. A few months ago I added the topic tag “nationalism” to the topics this blog covers because I believe this is an issue which becomes relevant during global economic crises.

Germany’s ability and willingness to pay will decrease as the economy falters. Remember, Germany is more indebted than Spain and has also long been in violation the Maastricht Treaty’s stability and growth pact provision on government debt…

As I see it, we cannot continue with the existing currency arrangement. Countries like Spain (I am reverting to my habit of calling all the deficit countries “Spain” and all the surplus countries “Germany”) simply will not adjust quickly…

I want to highlight three things here from Wolfgang Munchau on the euro zone because he reaches conclusions I have reached. Below are excerpts of what Munchau writes about a Greek default, Italian solvency and euro zone dissolution.

10% ‘internal devaluation’ in Germany took eight years. We are talking now about 20-30% wage and price cuts in Greece and Ireland. How realistic is that?

In order for banks to hedge against multiple defaults in the eurozone periphery, banks must increase the ratio of equity to total assets at least five percent, a German researcher has argued. Dorothea Schäfer worked out for the Frankfurther…