Large German trade surpluses are ingrained in the Eurozone’s structure, but private sector mechanisms for dealing with the corresponding capital account deficit are broken. The unavoidable result has been large official capital account deficits by Germany (the bailouts) and the Eurosystem (Target2 balances). This column proposes the creation of a Germany sovereign wealth fund that would restart the private recycling of Germany’s excess savings – eventually cleaning out the Target2 imbalances and depreciating the euro in the process.
Most Read
Vox eBooks
Vox Talks
Events
-
3 - 4 May 2019 / London / Queen Mary, University of London
-
15 - 17 May 2019 / Florence, Italy / Florence School of Banking and Finance, European University Institute
-
16 - 17 May 2019 / University of Minho, Guimarães, Portugal / School of Engineering, University of Minho
-
20 - 20 May 2019 / Frankfurt am Main / SUERF - The European Money and Finance Forum Deutsche Bundesbank
-
20 - 22 May 2019 / Florence, Italy / Florence School of Banking and Finance, European University Institute
