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Germany rebuffs US criticism of its growth model | Germany rebuffs US criticism of its growth model |
(about 1 hour later) | |
Germany has hit back at US criticism of its export-led growth model, describing the attack as "incomprehensible". | |
The rebuff came after a US Treasury report said Germany's dependence on exports for growth was hurting the eurozone and the wider global economy. | The rebuff came after a US Treasury report said Germany's dependence on exports for growth was hurting the eurozone and the wider global economy. |
It also said that domestic demand growth in Germany had been "anaemic". | It also said that domestic demand growth in Germany had been "anaemic". |
But Germany's finance ministry said there were "no imbalances" in its economy and that its current account surplus was not a cause for concern. | But Germany's finance ministry said there were "no imbalances" in its economy and that its current account surplus was not a cause for concern. |
A surplus happens when a country's income from exports is greater than its import bill. | A surplus happens when a country's income from exports is greater than its import bill. |
In its report, the US Treasury said that "Germany has maintained a large current account surplus throughout the euro area financial crisis, and in 2012, Germany's nominal current account surplus was larger than that of China". | In its report, the US Treasury said that "Germany has maintained a large current account surplus throughout the euro area financial crisis, and in 2012, Germany's nominal current account surplus was larger than that of China". |
'Sign of competitiveness' | 'Sign of competitiveness' |
Germany is the eurozone's largest economy and has been one of its key drivers of growth in recent years. | Germany is the eurozone's largest economy and has been one of its key drivers of growth in recent years. |
Its export prowess is seen as one of its key strengths and has helped cushion the impact of the region's debt crisis on its economy. | Its export prowess is seen as one of its key strengths and has helped cushion the impact of the region's debt crisis on its economy. |
Germany narrowly avoided recession earlier this year, but GDP in the second quarter of 2013 was driven up by demand from both consumers and businesses. | Germany narrowly avoided recession earlier this year, but GDP in the second quarter of 2013 was driven up by demand from both consumers and businesses. |
However, the US Treasury report said that Germany's dependence on exports coupled with slow growth in domestic demand had "hampered rebalancing" of Europe's growth. | However, the US Treasury report said that Germany's dependence on exports coupled with slow growth in domestic demand had "hampered rebalancing" of Europe's growth. |
"The net result has been a deflationary bias for the euro area, as well as for the world economy," it said. | "The net result has been a deflationary bias for the euro area, as well as for the world economy," it said. |
Germany refuted those claims saying that its "current account surpluses are a sign of the competitiveness of the German economy and global demand for quality products from Germany". | Germany refuted those claims saying that its "current account surpluses are a sign of the competitiveness of the German economy and global demand for quality products from Germany". |
"The innovative German economy contributes significantly to global growth through exports and the import of components for finished products," a finance ministry spokesman was quoted as saying by the Financial Times. | "The innovative German economy contributes significantly to global growth through exports and the import of components for finished products," a finance ministry spokesman was quoted as saying by the Financial Times. |
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