The other big “warning” from the European Commission’s report this week was for Germany due to its excessive current account surplus. The current procedure for detecting macroeconomic imbalances has revealed this situation, given that the average current account surplus between 2013 and 2015 was 7.5% compared with an alarm threshold of 6%. The new records in this area in 2016 and the forecasts that point to figures of over 8% for 2017 show this is a problem which is continuing to get worse.
The old problems of the euro area endure, as well as the resistence to put an end to them. Consumption in Germany has improved and the advances should not be underestimated, but they can also be improved on. At the same time, investment in machinery declined 2.6% in the fourth quarter of 2016. In other words, Intermoney analysts say:
The afore-mentioned factors confirm the deficit in consumption and investment which the German current account surplus shows, indicating the need to do more to find a solution to this matter. Also from an egotistical viewpoint, given that productivity per worker and per hour worked only grew 0.3% and 0.6% respectively. That said, in this context, Germany’s insufficient plans to boost public and private investment seem to endorse this. And at the same time, the advance in public spending is linked to an unexpected question like the help for refugees and not to a pre-defined plan.
But in Germany they continue to focus more on criticising the ECB’s stimuli. This came up again during the presentation of the Bundesbank’s 2016 accounts, which revealed an 87% drop in profits to 399 million euros. Something which Draghi would justify very simply: the ECB’s objective is to monitor compliance with inflation targets and not to make money.
“So as we can see, a new year, but the same problems. And European markets which risk being marked by political noise in a session without any decisive information,” concludes Intermoney.