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Germany too reliant on external demand, needs reform now: ECB's Praet

Published 09/20/2016, 12:18 PM
Updated 09/20/2016, 12:20 PM
© Reuters. European Central Bank executive board member Peter Praet attends the 2016 Institute of International Finance (IIF) Spring Membership meeting in Madrid

FRANKFURT (Reuters) - Germany should take advantage of the good times to develop its domestic markets because its economy is too reliant on external demand and its trade surplus is an anomaly, European Central Bank Executive Board Member Peter Praet told a French newspaper.

"The country's enormous current account surplus is an anomaly at almost 9 percent of GDP," Praet told L'Opinion in an interview. "Growth is too driven by external demand. Germany has the fiscal space to develop internal demand."

He said it was up to Germany to develop its internal market, possibly through higher wages, increasing investment or reducing taxes.

"The very good environment provides a unique opportunity that won't necessarily last, as Germany is facing substantial industrial challenges in the years to come, for example in the car industry," Praet said.

Latest comments

If Germany use its surplus trade for stimulating the internal demand....will be THE END!! . The problem is not that. The problem is the bigger deficits of the South european countries without solution...these countries like Spain, Greece, Portugal, Italy with great deficits and unemployment rates are a real fear....
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