Angela Merkel
Berlin: Chancellor Angela Merkel blamed a “too weak” euro for part of Germany’s trade surplus, telling a group of students that bolstering domestic consumption was the best way to address imbalances with countries such as France.
In a panel discussion that included talk of building a closer relationship with French President Emmanuel Macron, whose election Merkel called an “extraordinary event in French politics,” Merkel was asked how to deal with the trade imbalance between the two nations. Part of the blame goes to European Central Bank monetary policy, she responded.
“The euro is too weak -- that’s because of ECB policy -- and so German products are cheap in relative terms,” Merkel said in Berlin during a school visit on Monday. “So they’re sold more.”
Seeking to build on Macron’s election, the two sides said German and French finance officials will now prepare a set of proposals, including ways to reduce differences in corporate taxation, for discussion at a joint cabinet meeting in July.
The chancellor’s macroeconomic discussion followed an outline of the European Union’s challenge in overcoming the UK’s exit from the bloc, which Merkel laid out to the students. She said her main policy goal will be to keep the EU’s 27 remaining member states together and to ensure that the region prevails economically.
That means needing “to help Macron so he’s successful,” Merkel said. Her finance minister, Wolfgang Schaeuble, also laid out plans to ramp up Franco-German cooperation and strengthening the euro area. He spoke yesterday alongside French Finance Minister Bruno Le Maire, who made his first visit to Berlin since the French election.
“We know that strengthening the currency union is of particular importance,” Schaeuble told reporters. “Both of us believe that Germany and France have a special responsibility to take the lead.”
Merkel took up Franco-German trade relations to illustrate how greater consumption at home could reduce imbalances, with more Germans buying French products as a way to bolster imports.
