World Economy

German Trade Surplus Affecting Europe

German Trade Surplus Affecting EuropeGerman Trade Surplus Affecting Europe

The situation in Athens seems to have calmed down, but former Federal Reserve Chairman Ben Bernanke thinks Europe has an even bigger issue to worry about: Germany, Business Insider reported. In a blog post, Bernanke wrote that the failure of the eurozone as a whole is very much related to the “highly asymmetric outcomes” among member nations. In other words, Bernanke is attributing Europe’s woes to the fact that countries like Germany are benefiting at the expense of the monetary union’s weaker members like Greece, Spain, and Italy. Bernanke points to unemployment rates as a clear sign of the disparity in Europe. Unemployment in the eurozone as a whole is actually up from late 2009/early 2010, when it was at about 10%. Today, eurozone unemployment stands above 11%, and even passes 13% when excluding Germany. Germany’s unemployment rate is less than half of that, at under 5%.  German unemployment is low, in part, because of the country’s strong trade surplus.