Europe

Hands off our trade surplus, 'stingy' Germans tell US

German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble
Image caption Chancellor Angela Merkel has presided over a boom in German exports

In what other country could the slogan "Miserliness is Cool" be a seller?

According to the dictionary "Geiz ist Geil" could also be translated as "tight-fistedness or stinginess is cool".

It would not work in most countries. Call your customers "miserly" and they would feel insulted.

But in Germany it is a source of pride, which is why it was used by a chain store to sell electronic goods.

The sentiment is dear to the hearts of Germans, who argue that they work hard and save and believe their thrift and their industriousness is now being rewarded by fast growth and a boom in exports.

That is why German politicians take a very dim view of American calls - from President Barack Obama down - to limit the size of trade surpluses.

The country's finance minister, Wolfgang Schaeuble, minces no words in an interview with the news magazine, Spiegel, when he says that Germany's export success is a result of "increased competitiveness of companies. The American growth model, on the other hand, is in a deep crisis".

Horror

And when German leaders see the US Federal Reserve pushing money into the banking system to the tune of a further $600bn (£350bn, 430bn euro), they - citizens of a country allergic to credit - throw up their hands in horror.

Mr Schaeuble said he did not "recognise the economic argument behind this measure".

"The Fed's decisions bring more uncertainty to the global economy," he argued.

"They make it more difficult to achieve a reasonable balance between industrialised and emerging economies, and they undermine US credibility when it comes to fiscal policy.

"It's inconsistent for the Americans to accuse the Chinese of manipulating exchange rates and then to artificially depress the dollar exchange rate by printing money."

Trade surplus

Figures out this week showed that German exports rose by just under 23% in September compared with the same month a year ago.

Germany's foreign trade balance showed a surplus of 16.8bn euros (£14.5bn, $24bn) in the same month compared with 11.5bn euros in the same month last year.

They might tear their hair out in Washington, but in Germany they pat themselves on the back.

Image caption Germans pride themselves on thorough methods of manufacturing

When others suggest that Germany should rein in its surplus, ordinary Germans do not take much notice.

One way it might lower that excess of exports over imports is to get Germans spending more at home.

But German consumers are loathe to consume and say openly that they believe in saving first.

The German view is that outsiders are simply trying to rein in German success rather than sorting out their own problems.

In April, popular feeling turned against Greece over the bail-out of its public finances largely by German taxpayers.

When BMW sells strongly in China, they say it is because of the solid German economic way of a reliance on old virtues and thorough methods of manufacturing as opposed to fly-by-night finance.

They argue that German companies sell goods that people want to buy, particularly rich people in China who cannot get top-of-the-range BMWs fast enough.

BMW told the BBC that their sales were so strong because so many Chinese needed big BMWs for their chauffeurs to drive.

So there is a lot of finger pointing going on as global leaders head for South Korea for the G20 summit.

The US wants Germany to rein in its trade surplus. And it alleges that China manipulates its exchange rate and should stop doing so.

Germany argues that the United States is manipulating the rate of the dollar by printing money and so devaluing its worth.

There is also a fundamental division now between countries that worry more about getting public spending down and those that say that too much cutting means a return to recession.

When the G20 leaders meet in Seoul at the end of the week, this argument will be had in full - face to face.

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