WirtschaftsWoche Exclusive Schäuble Sees End of Massive Trade Surplus

Germany’s huge current-account surplus is the largest in the world and is said to be a major cause of global economic imbalances. Finance Minister Wolfgang Schäuble is now saying he expects it to normalize.
What goes up must come down. German Finance Minister Wolfgang Schäuble.

Only last weekend, Wolfgang Schäuble was at an IMF meeting in Washington to defend Germany's current-account surplus yet again. Now he is predicting an end of the country's excessive trade surplus - something Europe’s largest economy has been criticized for repeatedly over the years.

"I take it as a given that the German current account surplus will return to normal levels," Mr. Schäuble wrote in an article for business weekly WirtschaftsWoche, a sister publication of Handelsblatt Global.

"We have taken a number of measures to further strengthen domestic demand," he wrote, pointing to an improvement in the framework conditions for private investments, an increase of government investments and the introduction of a minimum wage.

The EU sees current account surpluses of over 6 percent of gross domestic product as a danger to the financial stability of the euro zone. Germany has clearly exceeded this threshold for years. Mr. Schäuble pointed out that current forecasts predicted a surplus of around 7 percent next year – still high but below the 8.3 percent it stood at in 2016.

In addition, he stressed he had proposed to reduce the overall tax burden in the next legislative period, which in turn should lead to further momentum: "In the medium term, the aging society will also contribute to a reduction in the surplus," Mr. Schäuble wrote.