Two weeks ago, German finance minister Wolfgang Schauble confirmed Donald Trump’s charge that the Euro is far “too low” for Germany, but said he is unable to do anything about it and instead blamed Mario Draghi. ‘The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position,’ he told Tagesspiegel on February 5. ‘When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus’.’.’.’I promised then not to publicly criticise this [policy] course. But then I don’t want to be criticized for the consequences of this policy.’
Then, on Saturday, his boss German Chancellor Angela Merkel echoed her finance minister, and also admitted that the euro is indeed “too low” for Germany, but once again made clear that Berlin had no power to address this “problem” because monetary policy was set by the independent European Central Bank.
“We have at the moment in the euro zone of course a problem with the
value of the euro,” Merkel said in an unusual foray into foreign
exchange rate policy.
Merkel also confirmed that Germany benefits from not having the Deutsche Mark, whose value would be far higher, and instead piggybacks on the weakness of other European nations, implicitly confirming recurring allegations that Germany benefits from the misery of Europe’s periphery.
“The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.”
This post was published at Zero Hedge on Feb 18, 2017.