Exports drive record German surplus
GERMANY's trade surplus rose to a record high in September as exports climbed across the board at a time when Europe's largest economy has come under fire for relying too heavily on foreign trade.
The seasonally adjusted trade surplus widened to €18.8bn from a revised €15.8bn in August. Until now the record had been €18.7bn in September 2007.
International criticism has mounted – especially from Washington – that Europe's bulwark economy must do more to spur domestic demand and that its reliance on exports is hampering Europe's economic stability and hurting the global economy.
"The record surplus is likely to add fuel to the flames, but I don't see a problem in them," said Stefan Schilbe, of HSBC Trinkaus, highlighting the differences of views on both sides of the Atlantic. "With a certain delay, German companies will increase their capacities, which will help our trade partners because more goods and services will be bought from there."
The US administration reprimanded Germany in strong terms late last month in its semi-annual report to Congress for its economic imbalances.
Germany's current account surplus, at €19.7bn in September, is the biggest in the world.
European Commission President Jose Manuel Barroso used softer language in Frankfurt this week, but his message was similar: Germany had "homework" to do on stability in the eurozone. (Reuters)