Schauble Agrees With Trump That Euro Is “Too Low” For Germany, Blames Mario Draghi

Jon Alternative Media, Blogosphere, Economy, Fiscal Policies

In surprising comments that may rekindle a verbal currency war between president Trump and Europe, German finance minister Wolfgang Schuble told German newspaper Tagesspiegel that in his opinion the Euro is “too low” for Germany, echoing criticism from Trump’s trade advisor Peter Navarro, who last week told the FT that Germany was exploiting its US and EU partners by using a ‘grossly undervalued’ euro to create a vast trade surplus. The comment placed Germany, alongside China and Japan, in a category of countries that the Trump administration has accused of currency manipulation for competitive advantage.
As the FT reports on Sunday morning, Schauble acknowledged that the ECB had to set monetary policy for the eurozone as a whole, but said: ‘It is too loose for Germany.’ A recent chart from Morgan Stanley confirms that on a PPP basis, the EUR is over 40% undervalued for exporting and current surplus powerhouse Germany on a standalone basis, however for many of Europe’s peripheral countries it still remains expensive.

This post was published at Zero Hedge on Feb 5, 2017.