While few European states can pretend to share Germany’s distinction of being a “country of poets and thinkers,” none can rival German abilities to extract so much wealth from the rest of the European Union.
Last year, Germany posted a 159.3 billion euro surplus on its goods trade with other countries in the EU — one of the world’s largest free-trade areas and a region with privileged access to German goods and services.
That’s the way it’s been since 1958, when Europe’s common market opened up.
Germany’s enormous EU bounty consistently accounts for two-thirds of its net foreign trade income in a market structure where Berlin remains an undisputed leader and a principal regulator.
This year looks set to mark another record-high EU trade income for Germany. The surplus during the January-April period was running at an annual rate of 175 billion euro — a 10 percent increase on the country’s EU trades in 2017 — according to statistics from Germany’s Bundesbank.
A country representing 28 percent of the monetary union’s economy and living so grandly off the rest of its partners is a structurally destabilizing factor.
To this day, economists pointing out that fundamental problem have been ridiculed as hopelessly naive because, as the mantra goes, the European project has always been, and always will be, a political construct to keep the Europeans off each other’s throats.
That charge is not only false, but it also bears the seeds of its own destruction.
Taking hundreds of billions of euros of purchasing power out of the monetary union, Germany makes it virtually impossible for other euro area economies to grow and create jobs as they struggle to bring down their public debts and deficits.
Instead of accumulating enormous wealth on the back of its euro partners, Germany should stimulate its domestic spending to buy more goods and services from them.
At the same time, Germany can relieve its growing labor shortages by offering jobs to more than 17 million EU people that are currently looking for work and a meaningful future.
And there is more: Recycling some of last year’s roughly $300 billion trade surplus — through direct investments in the rest of the EU — Germany would boost economic growth and employment in other countries in the bloc, solve the problem of its shrinking manpower and adjust its overflowing external accounts.
Those would be appropriate economic policies for a country running large and systematic trade surpluses. Such policies would also even out the intra-area growth dynamics and stabilize the monetary union in a more homogeneous manner.
And none of that would be actions of EU solidarity loathed by the tight-fisted German government.
It is no wonder that the “everyone for themselves” attitudes have led to the revival of nationalism, alienation from the European project and an increasing popularity of “my country first” slogans — even in places like Italy, where the traditional idea of a united, peaceful and prosperous Europe inspired generations.