Merkel says euro’s rise set to impact Germany’s trade surplus

  • Banking
  • Friday, 01 Sep 2017

BERLIN: Chancellor Angela Merkel said the rising euro is almost certain to have an impact on exports and that she’s not too concerned about Germany’s trade surplus with other countries.

“Personally, I don’t view the trade surplus as so dramatic,” Merkel told reporters in Berlin. “But if the trade surplus should now shrink, then that would be one of those developments that’s really out of our hands.”

President Donald Trump has pilloried Germany for its trade surplus with the US, while Merkel has said it’s the result of demand for her country’s quality products. Germany, Europe’s biggest economy, exported goods to the US worth about US$66bil more than it imported last year, leading to auto producers, including Daimler AG, Volkswagen AG and BMW AG, being targeted by the Trump administration for criticism. The euro on Tuesday rose to its highest level in more than two years.

“We don’t have a political influence over the exchange rate, we’re happy about our competitiveness and we avoid unfair trade practices,” Merkel said.

The chancellor spoke for more than 90 minutes at her annual summer press conference less than four weeks before a national election, addressing an array of topics including relations with Poland, sanctions on Russia and discussions with French President Emmanuel Macron on deepening ties within the European Union.

“I don’t have anything against the concept of a European finance minister as such,” Merkel said on Tuesday. “You just have to work out what such a finance minister could do and we’re not at that point yet in our talks with France.”

The chancellor also called on Turkey to release jailed Germans, saying the worsening relations between the two countries will have an economic impact.

”I would very much like to have better relations with Turkey, but you have to look at the reality,” Merkel said. “We are in a very difficult phase in our relations.” Merkel said the arrest of German citizens, including a journalist, in Turkey is unjustified.

Relations between the two countries, long complex, have been further complicated after Merkel pressed for the European Union to strike a deal with Turkish President Recep Tayyip Erdogan to stem the flow of asylum seekers into Europe.

Turkey was promised six billion euros from the EU in exchange for settling refugees to stop them traveling to Europe, and Erdogan has repeatedly threatened to tear up the agreement.

Merkel, whose Christian Democratic Union-led bloc is leading in public opinion polls, defended her handling of the refugee crisis during the press conference. Merkel told reporters that she remains convinced that Germany can’t wall itself off from the rest of the world.— Bloomberg

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