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Merkel: The Euro is too low for Germany

German Chancellor Angela Merkel suggested on Saturday that the euro was too low for Germany but made clear that Berlin had no power to address this “problem” because monetary policy was set by the independent European Central Bank.

Merkel made her remarks at the Munich Security Conference as U.S. Vice President Mike Pence looked on. They seemed aimed at addressing recent criticism from a top trade adviser to President Donald Trump, who has accused Germany of profiting from a “grossly undervalued” euro.

“We have at the moment in the euro zone of course a problem with the value of the euro,” Merkel said in an unusual foray into foreign exchange rate policy.

“The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.”

The euro has fallen nearly 25 percent against the dollar over the past three years, touching a 14-year low of $1.034 in January. But it has since risen to roughly $1.061.

In late January, Peter Navarro, the head of Trump’s new National Trade Council, said the euro’s low valuation was giving Germany an edge over the United States and its European Union partners.

His comments came weeks after Trump himself said the dollar’s strength against the Chinese yuan “is killing us”, deepening concerns that his administration could pursue a more confrontational, protectionist approach to trade.

Merkel and other German officials pushed back forcefully at the time.

On Saturday, the chancellor said she did not want to delve into the causes of Germany’s trade surplus, noting that this was sure to be a continuing topic of discussion with U.S. officials.
But she said both countries were proud of their products and Washington had no reason to be unhappy about the level of German imports.

“When you look around the room and see how many iPhones and Apple products are in play, I think the vice president can be completely satisfied, and Fifth Avenue is still underpopulated with German cars,” Merkel said, drawing applause from the audience. (via Reuters)

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7 comments

  1. “The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.”

    LOL
    Illiterate people might believe that bullshit.
    What about the German low wages policy and its effect?

    • Seeing as Germany designed the eurozone specifically to have a lower value euro than the DM (by including a lot of weak economies) then like everything the Germans say about economics it is a pile of bullshit.
      ~
      More important, perhaps, than the German low-wage policy is that the morons do not understand the concept of national accounting. This is to say that running a current account surplus is actually a stupid thing to do, especially when the entire eurozone is collapsing. Every available euro needs to be spent on employment and investment. However, when you think like a Kraut you think like an ignorant jack-booted nationalist: Heil Deutschland! The rest of Europe can go fuck themselves. With this mentality, they destroy Europe’s future, and their own along with it.

      • Germany has ruled continental europe for a while now. And will continue to do so. Nothing new here.

        • No. nothing new since 1939. The problem is the period 1945-2010 which has been quietly forgotten by the Krauts.

      • Giaourti Giaourtaki

        Their main problem is that the debts-buying of ECB means zero interest for savers and pension-funds, lots of banks started to tax their customers, so every shopping, getting cash, etc costs something – this is also the main reason why the far right and liberals getting votes. Instead all money (esp the cheap money) is put into houses and apartments buying, so no investments will ever come but the bastards still call it investments.

        Anyway: America Shut Up! Orwell was in England?

  2. Giaourti Giaourtaki

    When will show up some scientists claiming Dollar and Euro should be 1:1 anyway? Would make it easier for customers, btw but I guess some online sellers would suffer huge with their false exchange-rates that provide’em extra profits.

  3. She said she can’t do anything about it. Oh yes, she can: she can go back to the D-Mark. Cause that is what the Eurozone needs. Not a Grexit, not an Italeave, etc. No, the Euro needs a GERxit. The D-mark will rise in value cause people will want to buy them but it will make other European countries competitive again. What Germany couldn’t do with tanks, they did with banks. But also because other countries let them do it.