……a large country with a huge structural current account surplus does not just export products. It also exports bankruptcy and unemployment, particularly if the counterpart capital flow consists of short-term debt.
~ Martin Wolf
Read more at Germany’s strange parallel universe – FT.com.
Really? I don’t think I’ve ever heard such crap. Germany doesn’t export bankruptcy or unemployment. Whilt it is true that other countries experience these problems that is not down to Germany but their own shortcomings.
The basket cases in the EU are solvent only because they’ve had access to borrowed capital at low rates on the euro due to Germany’s strength. That they have squandered the money and not used it to build or rebuild their economies is down to them. If they were not in the EU their borrowing costs would triple and their currencies would collapse sending them bankrupt.
As for the rest of the world Germany’s arm is simply not that long.
Simple math tells us that if you run a current account surplus, someone else has to run a deficit. And consistent deficits indicate a worsening Net International Investment Position, normally due to rising debt though it can be funded by equity investment (like China buying 5% of Ukraine).