14:38 GMT18 January 2021
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    Germany, the economic powerhouse of Europe, is often considered one of the few success stories of the European Union.

    Berlin insists that the road to recovery and prosperity lies through trade surplus and export-led growth, but the former is what hurts the country and the Eurozone, according to some experts.

    "Germany’s chronic trade surpluses lie at the heart of Europe’s problems; far from boosting the global economy, they are dragging it down. The best way to end this perverse situation is for Germany to leave the Eurozone," argues Patrick Chovanec, an adjunct professor at the School of International and Public Affairs, Columbia University.

    Germany produces more than it spends, but there is no evident reason for Berlin not to spend excess savings on goods and services, as well as smart investing both domestically and abroad, according to the expert. Instead, Germany lends money to struggling European economies, forcing them in fact to spend less.

    The austerity measures Germany is so fond of failed to produce growth in Greece, Ireland, Italy, Portugal or Spain. The Financial Times called austerity "an utterly dysfunctional policy regime that has proved economically illiterate and politically unsustainable."

    "The "growth" Germany generates by funding unsustainable trade imbalances — inside and outside the eurozone — is an illusion. It is growth that is borrowed, for only a while. For Germany, and for the world, it’s a bad trade," Chovanec said in an article, published in the Foreign Policy magazine. "Running a trade surplus means financing someone else’s trade deficit," he added.

    The best solution for the Eurozone crisis is for Germany to leave the euro region and adopt the Deutsche mark, according to the expert. At the same time, this is the least likely scenario.

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    Tags:
    deficit, euro, austerity measures, economic growth, eurozone, trade surplus, economy, Germany
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