Summary of German Rebalancing

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German Rebalancing  summary

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Recommendation

Thrift is prudent, but not to excess, says economist Simon Tilford. He takes the German government to task for a robust and enduring current account surplus, arguing that excessive savings are harming growth both at home and in the euro zone. He advises Germany to adopt reforms that can raise living standards and economic productivity. Tilford writes at a level accessible to the lay reader as well as the economist, and his articulate report makes several cogent, relevant observations. getAbstract recommends it to policy makers, investors, executives and euro watchers.

In this summary, you will learn

  • Why Germany has such a large current account surplus,
  • How such a surfeit of savings harms both its economy and those of its trading partners, and
  • What the government needs to do to address this severe imbalance.
 

About the Author

Simon Tilford is deputy director of the Centre for European Reform.

 

Summary

Entrenched policies are keeping Germany from reducing its massive current account surplus, which not only curbs domestic investment and spending but leaves the euro zone in a moribund state. Its 2014 surplus, a national record of 7.5% of GDP, was the world’s biggest, at more than €200 billion. In fact...

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