TRADE SPAT

Germany, IMF at Loggerheads on Surplus

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Picture source: Reuters

Germany and the International Monetary Fund, or IMF, do not appear any closer to reaching an understanding in their longing-running disagreement over monetary policy and Germany’s large trade surplus.

Finance Minister Wolfgang Schäuble, in Washington on Thursday to attend the IMF’s spring meeting, simply passed the buck and pointed the finger at the European Central Bank. The ECB’s loose monetary policy, buying up trillions in bonds and keeping interest rates at zero, has inflated Germany’s trade surplus, according to Mr. Schäuble. The finance minister added that he was skeptical of the ECB’s policy from day one.

The Washington-based IMF respectfully disagrees. Tobias Adrian, the IMF’s financial counsellor and head of its capital markets research division, told Handelsblatt in an interview that Germany was thinking about its economy in isolation, while the fund was obligated to take a more global approach.

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