January 7, 2013

Germany Is Not Profitting from Eurozone

Gunnar Beck, The Guardian

AP Photo

The FT's newly ordained "person of the year", the ever sardonically smiling ECB president, Mario Draghi, recently addressed Germany's co-operative banks: eurozone trade, he claimed, accounted for a staggering 40% of Germany's entire GDP. Not a single eyebrow was raised in the audience. The truth is somewhat different: total exports are equivalent to around 43% of Germany's GDP and the eurozone accounts for less than 37% of total exports, according to recently revised figures. That means that exports to the eurozone nominally account for roughly 15% of German GDP. This share will fall further. In reality, however, the contribution of the eurozone to the German economy is even smaller. The reason for this is simple: the eurozone countries do not pay for most imports from Germany;...

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TAGGED: Germany, Eurozone

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