Germany is the world's #2 exporter, very close behind China. In 2010 it exported a total of 960 billion euro, amounting to 42% of its GDP. Its trade surplus came to 153 billion euro, almost 7% of GDP. Impressive stuff, no doubt, and an achievement that Germans are justly proud of.
But, not all surpluses are created equal... 35 billion of that surplus, a whopping 23%, was accounted by just four countries: Italy, Spain, Greece and Portugal. Yes, to a very large extent the PIGSs' munching at the trough was what kept Germans working in their factories. And if you just add France, another country that is currently screeching towards the borderline of fiscal probity - at least according to financial markets - the numbers get even more interesting. Germany's PIGS+F trade surplus jumps to 64 billion, a full 42% of Germany's entire trade surplus. In GDP terms (trade surplus is GDP-additive), PIGS+F surplus accounts for nearly 3% of Germany's economy.
Germany Slurping With The PIGS
However, short-sighted and haphazard German talk of harsh reprisals are turning the country's best customers into pariah states. Recently, a German politician even proposed that eurozone members that can't get their fiscal house in order, raus!, should have their flags fly at half mast at all EU sites. Germany is not making any friends acting in this ham-fisted fashion.
Ah, you may say, Germany doesn't need to coddle dead PIGS anymore and can just export wonderfully advanced stuff to super-charged China. Really? Germany had a whopping 23 billion trade deficit with China in 2010.
German people have a very serious choice to make here, and Mrs. Merkel is furiously waffling instead of leading and speaking clearly. From one side of her mouth she's insisting that she's fully committed to the euro, the eurozone, etc. From the other side emanate dire threats of bankruptcy, default, exit from the eurozone - even the EU itself, all directed at those very PIGS whose consumers are keeping her countrymen happily and gainfully employed.
She's got to tell Germans the truth, at long last: Germany is such an export powerhouse and fiscal icon precisely because the others aren't. It takes two to tango, Mrs. Merkel...