That's not the real reason. Germany is facing a demographic time bomb due to its failure to have babies in recent years. A current account surplus is a a way of saving for the time when the current workforce starts retiring. However what is a worry for the Germans is that many of their external investments (290bn dollars) are in three southern european countries that are at risk at the moment e.g. Spain, Portugal and Greece.
Germanyâs trade surplus and investments in southern Europe | vox - Research-based policy analysis and commentary from leading economists
Most countries behave in their national interest at the end of the day. Germany benefits from membership of the Euro as the weaker countries of Europe keep the price of their money low for them enabling them to sell their goods at more competitive prices all round the world. Their surplus with the rest of Europe is growing. German wages are not that low relative to the rest of Europe but they could be a lot higher given the relative prosperity of their companies.
German liberal and conservative forces agreed on keeping wages low; many Germans are in jobs that do not qualify for minimum wage. At the time of the reunification, the German workforce swelled with highly trained and disciplined workers who also were accustomed to low wages. As well, Turkish immigrants are crucial to the workforce and accept lower wages. The percentage of working poor in Germany has doubled in the past decades. The fact remains that lower wages - in fact 2% under the growth recommended by the EU - have eroded interior demand. It would not be unreasonable to think this might also affect the birthrate.
The biggest problem with Ireland was the property bubble. When the house bubble burst the foreign savers who had deposits in the Irish banks which relied on them to supply the necessary finance withdrew their deposits at the click of a mouse and the Irish banks were instantly insolvent. They were building empty properties and selling them at inflated prices- it was an unsustainable situation. German savers and banks that had lent moeny to Irish banks were lucky that Ireland decided against declaring bankruptcy but the housing bubble was not their fault.
But it does add to the German sense of smugness that they still have their savings accounts intact while those they lent to are struggling to make ends meet.
The property bubble was in part created by German offshore banks - not infrequently as a one-man office on Irish soil, carrying an Irish name but originating in Germany. (Recall, banking restrictions were more conservative in Germany, hence the move to offshoring to increase opportunity for speculative risk). UK banks were also involved, of course. The Irish bailout was a bank bailout; the economy destroyed by speculation and the property bubble that resulted. It seems somewhat disingenuous to feel smug on this matter, as the average Irish citizen was no more involved in the fiasco than the average German citizen.
Would Germany be in the same financial position today without the rate of exports to the periphery ?
W
e've discussed this before I think. Other countries e.g. Britain and Greece were also recipients of Marshall Aid and Greece was a beneficiary of Western military support that saved them from Communism also. Marshall Aid is something that is the USAs historical favour and marks it out as a true superpower. It was also the right thing for the US national interest as it ensured that Western Europe did not fall to communism and created new trade possibilities for American firms also.
Of course, and Japan as well. But the fact remains that the chief recipients of the Marshall Plan, including the deliberate preference of offshore business over the interests of US business, were Germany and Japan. This is not to underplay the abilities and successes of the Germans and Japanese, but clearly the program was deliberately targeted towards these countries (at the expense of those on US soil). Would the German economic miracle have precisely the same shape and timeline without US largesse ? I think not.
German industrialists were very often naive about Hitler and thought at first they could control him. They could not and by the time they realised that it was too late. They are no more guilty of collusion than your average German footsoldier fighting Hitlers wars. Most of this class of people have long since died and Germany today is a different place.
Yes, at first this is likely. US businesses, heavily invested in German corporations involved in rebuilding the German war machine, also did not realize this at first. (Upon discovery, it was determined by the US at the recommendation of one of the Dulles brothers iirc the that Ford etc. should not divest owing to the likely impact on the US economy.) That there was knowledge among German business leaders at some point, thus entering a long period of willful collusion, is well documented. (See
The Great Blond Beast, Christopher Simpson) That these business leaders were to be covered under the Nuremberg trials, and were not due to US request, is also documented.
No this gold was long since repaid as previously discussed in reparations in 1960 and since then. And sorry but the cost to the German tax payer of Greeces most recent bailout is vastly in excess of any sums we are talking about. This is a grasping after straws and an attempt to evade responsibility I think. Greece is broken because of Greece - it cannot blame the Germans. The Germans know that and feel smug because of it. In this case maybe with good reason. But the Greeks don't like that.
The gold reserves in question were part of a particular "loan agreement" signed by Germany and an Italian occupier, and were not returned. The forgiveness of Germany's war reparations to Greece in 1990 is documented, and was covered in the UK media.
