Mercantilism is official German government policy


I have just seen Dirk Becker (socialdemocrats) talking in front of the German parliament (in German, obviously). It is very important to recognize that the German government seems to be identifying a net exporting position (exports are higher than imports) with a policy that maximizes welfare of Germans. There is no other way to understand the speech by Becker, given that another colleague of his pointed out that the Germans are accumulated foreign debt because of their current account surplus and Becker argued strongly (in voice; weakly in argument) against this point. That the German economy has a private sector surplus and a black zero for the public sector is just possible because the rest of the world moves into debt (or decreases foreign assets).

Message to the rest of Europe: if you think that German domestic demand policy will be geared towards European economic needs, forget about it. Low inflation rates…

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