Running surpluses this way forces someone else to run deficits—because one country’s excess exports are another country’s excess imports. Germany is chronically overproducing and underconsuming, thereby creating pockets of debt and unemployment elsewhere, in particular, in the US and UK, and the eurozone periphery. The German government has been trying to reduce its budget deficit for years, but it was unable to do so because of a lack of political will on the part of other EU member states. The more Germany's current account balance grows, the more unstable it makes the global economy. With President Donald Trump now seen as a potential threat to the eurozone, "Germany’s ability to effectively maintain a free ride within the dysfunctional, but relatively stable EU is coming to an end", warns research firm Gavekal.
Germany is chronically overproducing and underconsuming, thereby creating pockets of debt and unemployment elsewhere, in particular, in the US and UK, and the eurozone periphery. The German government has been trying to reduce its budget deficit for years, but it was unable to do so because of a lack of political will on the part of other EU member states. The more Germany's current account balance grows, the more unstable it makes the global economy. With President Donald Trump now seen as a potential threat to the eurozone, "Germany’s ability to effectively maintain a free ride within the dysfunctional, but relatively stable EU is coming to an end", warns research firm Gavekal.