Dramatizing Europe

EUobserver / Barroso says German calls for treaty change are 'naive': "Referring to the German trade surplus of €134 billion, the commission president asked: 'Does the German public know that nearly 86 percent of these 134 billion, i.e., 115 billion, comes from trade in the EU?'"

This an interesting piece of information, if true, it seems a little high. It seems like this can be interpreted to mean that Germany's export is generating the deficits and debts of Southern Europe? These countries borrow to their public expenses while they consume German products. Now Germany wants these countries to cut their public expenses to be able to maintain their import of German goods? Barroso is against hard measures for Southern Europe.

Another interesting parameter of the debt crisis is that France's finance minister Christine Lagarde and a prominent German economist that I overheard on the Swedish radio says that there is no euro crisis. Because the lowering of the Euro value relative the US dollar and the Chinese renminbe facilitates German export to these countries. China exports more to EU than the US and is apparently worried about decreased competitiveness because of this.

Perhaps Obama that called Merkel that €750bn night for her to make up her mind also was worried that US competitiveness in Europe would go down. The US has longstanding claims on China for running an overvalued currency. Barroso says that the crisis has been good for Germany and I guess this is an additional reason to those delineated in his interview in Frankfurter Allgemeine Zeitung today.

Germany is Sweden's largest export nation and we would not like an euro that falls relative the krona either. However, Sweden would probably benefit from a strong and 'free' Germany that checks Russian power in the North East of Europe. If the moral from the above is that this development now rest on bleeding Southern Europe dry and suffering, causing undue societal unrest and tensions, such a wish might not be optimal.

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