Chancellor Angela Merkel on Thursday defended Germany against international criticism that it was not doing enough to reduce its high trade surpluses and rejected the idea that it should deliberately weaken its competitiveness.
Speaking in Berlin, Merkel said it was "absurd" to suggest German companies should reduce their quality or that wages in the export sector should be higher to weaken their competitive strengths.
"It cannot and should not be the case that anyone tries to weaken Germany's competitiveness artificially," Merkel said.
International criticism has mounted that Europe's largest economy must do more to spur domestic demand and that its reliance on exports is hampering Europe's economic stability and hurting the global economy.
The U.S. administration reprimanded Germany late last month in its semi-annual report to Congress for its economic imbalances. Germany's current account surplus, at 19.7 billion euros in September, is the biggest in the world.
Germany argues it has more than halved its current account surplus with the euro zone as a share of GDP since 2007.
Germany has exported more than it imports since 1952. Its trade surplus is largest vis-a-vis France, the United States and Britain.
Berlin's critics say its overall current account surplus last year was 6.9 percent of GDP - well above the 6 percent threshold the European Commission considers excessive.
They say Germany is still saving too much and needs to liberalise its service sector to boost domestic demand.
Separately, Merkel said on Thursday that Germany is ready to work on European Union treaties in order to introduce a European banking union that would both police banks and find joint solutions to their problems.
The debate about who pays for the clean up of Europe's banks is set to continue to hamper Europe's most ambitious reform since the inception of the euro currency in 1999.
Source: Reuters
