One of the world’s great import-surplus economies reined back on recent moves to stimulate domestic demand on Tuesday, bidding to resist international pressure at upcoming G20 talks — as well as denying US criticism of its policy.
Although it’s perhaps not the country you’d expect. Flashes via Reuters:
RTRS-GERMAN GOVT OFFICIAL SAYS GERMANY GOES NOT NEED FURTHER STIMULUS MEASURES
RTRS-GERMAN GOVT OFFICIAL SAYS OBAMA DID NOT URGE GERMANY TO TAKE FURTHER STIMULUS MEASURES
RTRS-GERMAN GOVT OFFICIAL SAYS NOBODY IN G20 IS DEMANDING FURTHER DEBT-FINANCED ECONOMIC STIMULUS PROGRAMMES
RTRS-GERMAN GOVT OFFICIAL SAYS GERMANY MUST SET EXAMPLE IN EUROPEAN UNION IN PARING BACK DEFICIT SPENDING
Nein! – Nein! – Nein! – Nein!
Which is all very ironic. Having liberated the renminbi (a bit), China is starting to play ball on reducing its imbalances with trade partners, but just in case you thought that Germany might follow suit — well, it had a message for you on Tuesday.
On the other hand, surely Greece got there first with testing the limits of austerity in Europe, in that the cuts attached to the Greek bailout will be the fiercest in OECD history. And as the FT points out, Germany’s planned spending squeeze will be too small to have much impact on economic growth.
Nevertheless — ‘Germany is the new China’. Discuss.
Related links:
Talking to a dining room table – Paul Krugman / NYT
Germany’s rebalancing act – FT Alphaville
Willkommen im Hotel Kalifornia – FT Alphaville