Germany hits back at US criticism over economy

Germany hits back at US criticism over economy
Photo: DPA
Germany on Thursday rejected as"incomprehensible" criticism levelled by the US Treasury that Berlin should do more to increase its domestic demand and rely less on exports in order to help boost the global economy.

"The criticism is not comprehensible," the economy ministry said in a written statement. 

"The current account surplus is an expression of the strong competitiveness of the German economy and of international demand for high-quality products from Germany," it said.

On Wednesday, a US Treasury report pointed the finger at Germany, saying that it needed to tap its surpluses to boost demand and help the eurozone pull back from deflation.

Its "anemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro-area countries have been under severe pressure to curb demand and compress imports," it said.

The critical report comes amid already strained German-US ties over reported US bugging of Chancellor Angela Merkel's phone.

Germany's current account surplus is "no cause for concern" for Germany,the eurozone or the world economy, retorted the German finance ministry in a statement.

It said there were "no imbalances" that called for a correction in German economic and budgetary policy and also pointed to "robust" salary growth, a gradual resumption of investment and increasing private household consumption.

Germany, which as Europe's biggest economy was looked to for help in leading the 17-nation eurozone out of its financial and debt crisis, has encountered similar calls to boost domestic demand in the past.

Its economic policy is set to change, albeit slightly, because Merkel's conservatives are currently negotiating to form a grand coalition with the Social Democrats whose key election issue was a national minimum wage.

German retail sales also fell slightly for the second consecutive month in September, official data showed on Thursday.

Retail sales slipped by 0.4 percent in September compared with August, the federal statistics office Destatis said in a statement. Retail sales had already contracted by 0.2 percent in August.

But over a 12-month period business improved for retailers, with sales showing a modest increase of 0.2 percent in September compared with the same month last year, the statisticians calculated.

READ MORE: EU-US deal would create '160,000 German jobs'

Member comments

Become a Member to leave a comment.Or login here.