Tradutor

quinta-feira, dezembro 08, 2011

Eurozone crisis tests the Limits of Divergence

In the beginning, there were EXPORTS and IMPORTS, X-M
(ver em português abaixo)




Germany, which had frequent Current Account deficits in the years prior to the introduction of the Single Currency in 2000, improved its external performance sharply after the introduction of the Euro, generating massive CAB surpluses. About 50% of the German CAB surplus is due to its trade with other Eurozone countries.   


This accumulation of annual external surpluses by one of the world's biggest exporters, of €155 bln, €134 bln and €141 bln in 2008, 2009 and 2010 respectively, is the single biggest direct cause of the current financial crisis in the Eurozone.  

The Netherlands also consolidated its Current Account surplus, which reached €43 bln, €39 bln and €45 bln in 2008, 2009 and 2010 respectively. 



France and Italy , in contrast, saw their external  accounts deteriorate sharply. 

Spain and Ireland showed increasing current account deficits
But Greece and Portugal  reported the worst performance, with Current Account deficits over 10% of GDP for several years, as the countries became increasingly dependent on imports.    


As a small, fragile economy with  GDP of only €172 bln in 2010,  Portugal  has a structural trade deficit (exports of €37bln and imports of €55 bln in 2010), importing more than three quarters of its food and energy needs. 

With a merchandise trade deficit of  €18 bln, Portugal's  Current Account deficit eased to €17 bln in 2010, from €18.4 bln and €21.7 bln in 2009 and 2008 respectively. 

Causes
We have yet to examine the true causes of this undesirable intra-Eurozone divergence.  
-        Perhaps some countries accepted overvalued conversion rates to the EURO and allowed local costs to overtake productivity trends. This divergence in competitiveness was clearly visible in the Harmonized Competiveness Indicators published by the ECB in 2010. 
-        Other countries diverted   investment to the non-traded sector, or lost out on emigrants’ remittances as interest rate differentials nearly disappeared.  
-        - Certainly, economies of scale allowed the bigger trading partners to capture most of the gains from trade.

The banks set their own external debt and country risk limits 
Of course, we know that a zero balance is necessarily the limit of convergence of Current Account deficits and surpluses.
But the Eurozone crisis demonstrates that the  limits to  divergence of external performance are just as real , and that these limits are set by the banks in their role of intermediating between the net surplus/creditor and net deficit/borrower countries.
Back in the first oil crisis of the 1970’s, this was called “recycling petrodollars”, as New York banks recycled OPEC deposits as loans to Brazil and other oil importers.

Consequences
It is, therefore, no surprise that German banks took a lead in promoting  the German export surplus and financing the corresponding deficits of its trading partners.  That may explain why in 2010 German banks reported record leverage of 32 times, followed by Belgian banks with leverage of 30 times, with Spanish banks showing only a leverage ratio of 19 times. 
The graph shows the leverage of private banks in various developed countries.  The data come from the IMF Global Financial Stability Report of April 2011, Table 1.1. Leverage is defined as tangible assets to tangible common equity for domestic banks.

And if German banks are the key recyclers of the cumulative German external suplus, German banks have the most at risk as the crisis moves into an ever more critical phase.  

That the “buck stops in Frankfurt” is evident in this chart showing the increasing divergence of TARGET2 claims among the national central banks of the Eurosystem.  In practice each BMW exported from Germany to Portugal, which is not immediately compensated by a large export of Port wine turns into a promise to pay by the Bank of Portugal to the Bundesbank.


Credit insurers continue on the sidelines
Credit Default Swaps were supposed to help lenders and borrowers reduce or at least transfer risk, but sovereign CDS have made little material contribution to averting or resolving the Eurozone crisis.   Sovereign 5y mid CDS pricing as of 2Dec2011, shows creditor Germany at only 96.86, nearly one hundred times better than debtor Greece at 9141.27, with Ireland at 705.20 and France at 195.63.

If only it were so simple. 

In fact, experience tells us that ultimately, no creditor can be better than its debtors
And this basic credit theorem needs to be better understood from Lisbon to Berlin, and from Athens to Brussels.   

Meanwhile, the National Central Banks have to promote the recapitalization and deleveraging of European banks and the ECB needs to maintain liquidity and to soften the Euro. Although austerity and constitutional budget caps are necessarily useful, though unpopular, they do not guarantee the settlement of the existing TARGET2 claims nor the convergence of Eurozone current accounts to reduce and reverse net borrowing requirements in the future. 

Once the banking crisis abates, the real work of adjustment and rebalancing  will have to focus on the external accounts.

Mariana Abrantes de Sousa
PPP Lusofonia, 8-December-2011

See also 
Recomendations to help resolve the Eurozone crisis 
Eurozone bank exposure by nationality of the bank
Of Banks, Central Banks and Moral Hazard 
A crisis by any other name 
http://econapproach.blogspot.com/2011/11/real-exchange-rates-and-eurozone-issues.html
France and the TARGET Eurostystem 
Current Account Surplus Watch 
Bundesbank on Germany's Balance of Payments
Krugman on Germany's massive, "I mean massive",  CAB surplus
McKinsey on Imbalances that strain the Eurozone 
One-armed Midgets can't guarantee intra-Eurozone adjustements
For more international macro-economic  indicators http://www.tradingeconomics.com

A crise da zona do euro testa os limites da divergência
No início, houve exportações e importações, X-M.
  Alemanha, que tinha défices frequentes  na balança de transacções correntes – BTC- nos anos antes da introdução do euro como moeda única, melhorou fortemente o seu desempenho externo desde 2000. Cerca de 50% do superavit de BTC alemão é devido ao seu comércio com outros países da zona euro.

A Holanda também consolidou seu superavit em BTC.
Em contraste, França e Itália, viram as suas contas externas a deteriorem-se rapidamente.
Espanha e Irlanda também aumentaram os défices de transacções correntes.
Mas a Grécia e Portugal tiveram o pior desempenho, com défices de transacções correntes de mais de 10% do PIB há vários anos, à medida que estes países se tornaram cada vez mais dependentes de importações.

Ainda falta analisar as verdadeiras causas desta divergência indesejável do comércio intra-Eurozone.
- Talvez alguns países tivessem aceite taxas de conversão sobrevalorizadas em relação ao euro e tenham permitido que os custos locais ultrapassassem a produtividade. Esta divergência de competitividade era claramente visível nos Indicadores de Competitividade Harmonizado publicado pelo BCE em 2010.
- Outros países desviaram investimentos para o sector não-transaccionável, ou perderam remessas dos emigrantes quando os diferenciais de taxa de juros quase desapareceram.
- - Certamente, as economias de escala permitiram aos maiores parceiros comerciais capturar a maior parte dos ganhos do comércio.

Os bancos determinar os limites da dívida externa
Sabemos que um saldo zero é necessariamente o limite de convergência de défices e superavits. Mas a crise da Zona Euro mostra que também existem limites reais à divergência das contas externas. Na pratica, esses limites são impostos  pelos bancos no seu papel de intermediadores  entre os credores excedentários e os credores deficitários. 

No tempo da primeira crise do petróleo da década dos 1970’s, este processo era conhecido como a “reciclagem de petrodólares ", em que os bancos de Nova York transformavam os depósitos da OPEP em empréstimos ao Brasil e a outros países importadores de petróleo.
É, portanto, nenhuma surpresa que os bancos alemães tomaram a iniciativa de promover as exportações da Alemanha financiando os défices correspondentes dos seus parceiros comerciais. Isso pode explicar porque é que em 2010 os bancos alemães reportavam uma alavancagem recorde de 32 vezes, seguidos dos bancos belgas com alavancagem de 30 vezes, enquanto os bancos espanhóis mostravam um rácio de alavancagem de apenas 19 vezes.

O gráfico mostra a alavancagem dos bancos privados em vários países desenvolvidos. Os dados provêm do Relatório de Estabilidade Financeira Global do FMI de Abril de 2011, a Tabela 1.1. A alavancagem dos bancos domésticos define-se como o rácio de activos tangíveis sobre o capital social tangível.

E se os bancos alemães são os recicladores chave do superavit externo alemão, os bancos alemães têm maior risco à medida que a crise entra em fases cada vez mais críticas.

Que o "buck stops in  Frankfurt" é evidente neste gráfico que mostra a divergência crescente de TARGET2, os montantes a pagar e a receber entre os bancos centrais nacionais do Eurosistema. Na prática, cada BMW exportado da Alemanha para Portugal, que não for imediatamente compensado por uma grande exportação de vinho do Porto, transforma-se numa promessa de pagamento do Banco de Portugal para o Bundesbank.

Seguradoras de crédito continuam à margem
Os Credit Default Swaps servem, supostamente, para ajudar credores e devedores, ou pelo menos reduzir ou transferir o risco de não pagamento. Mas os CDS soberanos pouco têm contribuído em termos materiais para evitar ou resolver a crise da Zona Euro. A 2Dec2011, os CDS soberanosa 5 anos cotavam a credora Alemanha em apenas 96,86, cerca de cem vezes melhor do que a Grécia devedora cotada em 9.141,27, e bastante melhor que  a Irlanda cotada a  705,20 e a França cotada a 195,63.
Se ao menos fosse assim tão simples.
Na verdade, a experiência diz-nos que, em última análise, nenhum credor pode ser melhor que os seus devedores.
Este teorema fundamental da concessão de crédito básico deveria ser melhor compreendido, de Lisboa a Berlim, e de Atenas a Bruxelas.

Enquanto isso, os bancos centrais nacionais devem promover a recapitalização e desalavancagem dos bancos europeus e o BCE precisa manter a liquidez e deixar moderar o Euro. As medidas de austeridade e as cláusulas constitucionais de restrição orçamental podem ser necessárias, apesar de impopulares, mas não são suficientes para garantir a liquidação dos saldos actuais no sistema de pagamentos do Eurosistema TARGET2 , nem a convergência dos saldos comerciais da Zona Euro a fim de reduzir e reverter a necessidades de financiamento no futuro.

Quando se ultrapassar a crise bancária, começará o verdadeiro trabalho de adaptação e reequilíbrio que terá de se concentrar sobre as contas externas.
Mariana Abrantes de Sousa

38 comentários:

PPP Lusofonia disse...

More important than a super bailout fund, Europe must
- rapidly recapitalize its banks, so they can absorb losses
- establish an Europe-wide deposit guarantee fund to keep local depositors safe and happy
- ensure that local savers and local banks do not have to absorb any discounts on the debt of their own sovereign goverments.

As Argentina showed, if you don't protect local savers, no bailout fund will be big enough.

PPP Lusofonia disse...

Limiting budget deficits is necessary but is not sufficient to overcome the Eurozoene crisis.
More important is to limit current account deficts (and surpluses) within the Eurozone, and to step up the prudence of prudential bank regulation.

The Eurozone has probably reached the limits of divergence, as can be seen by the CAB and TARGET imbalances.

PPP Lusofonia disse...

In a context of twin deficits (internal and external) the dramatization of budget deficits serves to shift attention away from the real cause of the crisis, the widening Current Account imbalances.

Anónimo disse...

Se o Euro vier a desaparecer será por causa desta divergência do comércio externo.

Sanções para todos disse...

Diz António José Seguro:

Sanções para todos "os divergentes"

Bancando ao comércio disse...

Há uma grande dose de ilusionismo na gestão da crise da Eurozone.

Enquanto se repetem os castidos e raspanetes sobre os defices orçamentais, ninguém olha para os desequilibrios externos dentro da Eurozone, que são bilaterais, na para a excessiva alavancagem dos bancos.

Angela (Copperfield) Merkel disse...

Portugal and Greece not the problem, but the symptom.

These huge external deficits are simply the more acute symptom of the "German exporters take it all" syndrome which plagues the entire Eurozone, with the help of imprudent financing from German banks.

Merkel is resorting to illusionist politics, berating Germany's trading partners downstage center to distract German taxpayer from the need to absorb the banking mistakes in the upstage corners.

And this time they can't call it the "soli tax".

German exporter dip disse...

German exports to euro zone countries dipping 0.4 percent in October compared to the previous year, a much weaker performance than to countries outside the currency bloc.
Exports to non-euro EU countries rose 3.1 percent on an annual basis, while those to countries outside the EU pushed up by 8.3 percent.

Is this the end of divergence?
http://www.ft.lk/2011/12/10/german-exports-post-sharpest-fall-in-six-months-surplus-dips/

Corrupt debt disse...

Two Ex-Ferrostaal Managers Must Stand Trial on Bribery Charges

Two former Ferrostaal AG managers must stand trial on charges of paying bribes of more than 62 million euros to obtain submarine orders from Greece and Portugal, a Munich court ruled.

Ferrostaal has been ordered to join the criminal proceedings as an accessory party, the Munich Regional Court said in an e-mailed statement."

This corruption added €2-3 billinon to Greek and Portuguse debt. Should this "corrupt debt" be paid or forgiven by Germany?

Anónimo disse...

Sovereign 5y mid CDS 27Dec2011
Greece 9376.04
Portugal 1079.20
Argentina 960.00
Ireland 710.49
Italy 479.70
France 215.18
Spain 379.57

CAB targeting disse...

Portugal precisa de um superavit da balança de bens e serviços de 20% do PIB só para pagar juros e dívida de 33,3 mil milhões de euros por ano.

PPP Lusofonia disse...

Judging by an article in the Economist on the "less dismal blogs", econobloggers everywhere could use a refresher course in international economics.
Is America really suffering from a "shortfall of spending" when it still has a Current Account deficit of over -3.2% of GDP and a much larger trade deficit?
Most likely, the US is suffering from a shortfall in demand for products and services "made in America". In open economies, both large and small, any domestic stimulus can drain away into higher imports and external debt, as happened with the "cash for clunkers" programs in hapless and helpless countries such as Ireland and Portugal.

Der Spiegel disse...

Europe's crisis is Germany's blessing, says Der Spiegel

See article in
http://www.spiegel.de/international/europe/0,1518,808248,00.html#ref=nlint

PPP Lusofonia disse...

FT Alphaville's article of 15-Dec-2011, shows the level net external asset/liability position of a number of countries, see
http://ftalphaville.ft.com/blog/2011/12/15/802081/its-the-balance-of-payments-stupid/

They also quote Carney, a former central banker of Canada that we have reached a"Minsky moment", when investors have to liquidate good assets at fire-sale prices in order to deleverage at any cost.

Or, as the Portuguese saying goes, "quem compra o que não pode, vende o que não quer".

PPP Lusofonia disse...

Portugal está viciado em importações, tem uma cultura de comprador e falta-nos uma cultura de vendedor.
O Guia do Exportador do AICEP começa com uma justificação de "porquê exportar".
A Alemanha é a maior economia da Europa e não se ensina alemão nas escolas secundárias ...

Comércio bilateral PT- FR disse...

Em 2010, Portugal reportou um superavit de 24 M€ com a França, o nossoo 3º parceiro comercial (como cliente e fornecedor).

Exportações de Portugal para França: 4,209 mil milhões €
Importações de França para Portugal: 4,185 mil milhões de €
Saldo positivo a favor de Portugal de 24 milhões €.

Portugal era em 2010 o 18º cliente e 21º fornecedor da França.

A França é um dos principais investidores :o 6º em estoque, o 1º em fluxos brutos e o 4º em fluxos líquidos, em 2009.

PPP Lusofonia disse...

Recycling petrodollars, Eurozone edition:

The mispricing of sovereign risk has a lot to do with excess liquidity and imprudent central bank regulation, allowing banks to become too overleveraged.
And the excess liquidity comes from looming and diverging CAB deficit/surpluses, as it did when the OPEC surpluses of the 1970's fed the Latin American debt crisis of the 1980s.
Contrary to the popular misconception among bank economists, without the usual balance-of-payments adjustment mechanisms, the current account balances within a currency union should not be allowed to diverge, since there is little to stop the trade pendulum from getting out of control.

The key policy implications are:
1. To keep a tight reign on cross-border lending in order to cap CAB surpluses/deficits, and to share the debt workout sacrifices with imprudent creditors
2. To focus the "Maastricht criteria" not on the internal budget imbalances but on keeping the external CAB imbalances modest and sustainable.

Mariana Abrantes de Sousa
See more in the PPP Lusofonia blog, views from the periphery from a former money-center banker

EU failures disse...

The euro had other deficiencies of which its architects were unaware. They laboured under the misconception that financial markets can correct their own excesses, so the rules were designed to rein in only public-sector excesses. And, even there, they relied too heavily on self-policing by sovereign states.

But the excesses were mainly in the private sector, as interest-rate convergence generated economic divergence: lower interest rates in the weaker countries fuelled housing bubbles, while the strongest country, Germany, had to tighten its belt in order to cope with the burden of reunification.

Meanwhile, the financial sector was thoroughly compromised by the spread of unsound financial instruments and poor lending practices.

Roubini on the paradox of thrift disse...

In short, the eurozone's periphery is now subject to the paradox of thrift: increasing savings too much, too fast leads to renewed recession and makes debts even more unsustainable. And that paradox is now affecting even the core.

German export record disse...

Meanwhile Germany's exports in 2011 were over €1 trillion for the first time - exports to Russia up 30% for example. Now there's apparently a Master Plan how to deal with Chinese competition.

P.S. The Swiss watch industry is ticking over nicely too :-) with an alltime record year in 2011. It's all about (s)ticking to your knitting.

Poliicy failure on the part of Europe disse...

The heavily indebted countries are now at a severe disadvantage, because they have basically become heavily indebted in a foreign currency, the euro.
They do not control it, and so they are in the same position as third world countries in Latin America were in at the beginning of the 1980s, where the countries became indebted in dollars. It was a situation that led to a lost decade there. Europe now faces a lost decade.

Europe has not yet properly prepared for a default.

Wim Roffel disse...

There are other places where we see similar diverging current accounts. For many decades we saw it between the Western world and the developing countries. It is also visible between the northern and southern parts of Italy.

It has something to do with power that comes from being a creditor and is used to force the debtor to follow policies that harm his trade balance.

Correlação versus Causalidade disse...

A discussão de correlação versus causalidade é muito importante, mas acho que seria bem mais fácil provar que foi a entrada de Portugal no Euro que CAUSOU o aumento do número de desempregados e na dívida (pública) externa, do que o contrário.
E também é necessário examinar a causalidade entre o défice (de comércio) externo e o défice (orçamental) interno.

Bastava um pouco de tempo e de “customs union theory” para mostrar que Portugal sofreu “trade diversion” e que não participou nos “gains from trade”.

É duro saber, mas é a realidade da divergência entre os países de Eurozone.

Greece ag trade diversion disse...

Greece's agriculture trade flows were substantially affected
as a result of the application of the CAP. The new regime brough about a substantial trade diversion and a shift of imports from third countries to EU
countries. This reorientation was associated with higher import prices, which contributed to the trade deficits.
Thus, Greece had traditionally a positive agricultural balance of trade, which turned after the
accession to negative. While, the ratio of exports of
agricultural products to imports with EC was 1.4 prior to the country’s accession, during the next decade this ratio had dropped to 0.72 by 1990 turning Greece into a deficit country in agricultural products.

Import financing feeds debt disse...

Portugal's cumulative trade deficit over the last 18 years, assuiming an interest rate of only 3%, accounts for €367 billion in external debt.

Se somarmos o défice comercial acumulado nos últimos 18 anos, entre Jan1993 e Mar2011, capitalizado à taxa de juro de 3%/ano, soma 367Mil Milhões de Euros

Do lado de lá disse...

Sim, o nosso principal problema é o défice externo. O nosso défice comercial não poderá reduzir-se enquanto não se reduzir o superavit comercial dos nossos parceiros, como pode ver no blog PPP Lusofonia http://ppplusofonia.blogspot.com/2011/12/eurozone-crisis-tests-limits-of.html

Mas Portugal também tem um problema interno de demasiados investimentos de baixa produtividade, de estradas sem tráfego, de rotundas no meio das vinhas, tudo facilitado pelo financiamento externo.

Numa coisa estamos de acordo, a união faz a força.
"we all hang together, or we will hang separately".

Divergence in unit labor costs disse...

It all goes back to divergence of unit labor costs

Divergence in the Eurozone disse...

Ver Alves e Barbosa, FEP 2011, sobre a divergencia e competividade

http://wps.fep.up.pt/wps/wp436.pdf

PPP Lusofonia disse...

The immediate cause of the Greek debt crisis is the divergence in the CAB surpluses and deficits among Eurozone members, reaching +8% of GDP in Germany and -13% of GDP in Greece (see my PPP Lusofonia blog post "Eurozone Tests the Limits of Divergence" http://ppplusofonia.blogspot.pt/2011/12/eurozone-crisis-tests-limits-of.html. Behind this, there are a lot of errors by a lot of official institutions and private economic agents including Eurostat and the misguided Maastricht criteria which encouraged de-budgeting, the Bundesbank and the National Bank of France which let their banks lend too much, Goldman Sachs, the ECB, and the local politicians who bought popularity who borrowed money, and the local companies and families who borrowed too much.

With a financial disaster of this magnitude, there's no major cause, no single culprit. That's why, historically, in these credit bubble/crash sequence, the sacrifice must also be shared by the foolish borrowers who borrowed too much, the creditors who lend too much, the banks who intermediated too much, and the regulators who regulated hardly at all.

PPP Lusofonia disse...

1.Foolish overleveraged borrowers default all the time, whatever the currency.

2. Foolish overextended creditors have to take losses all the time, whatever the currency.

3. Foolish regulators (imprudent central banks) who allowed the credit bubble get so big it turned into a crash, some times have to help clean up the mess and taking a good portion of the loss for the taxpayers.

Yes, this is a classic case of failure of market discipline, made much worse in a Single Market/Single Currency context, because the foolish net borrowers are "one-armed midget economies" with none of the ususal balance-of-payments adjustment mechanis (FX, import tariffs, export subsidies, capital controls, etc). This could apply direct consumption taxes, tighter credit controls, cut consumer credit and up bank reserve requirements, but are reluctant to do it.

To get a €1Bln cut in imports, these small fragile open economies have to undertake a much bigger cut in domestic consumption, since import prices don't reflect the shadow cost of the negative impact on the sovereign rating.

Yes, debt workout negotiations are a classic application of game theory, or of a children's game with the bedcovers. If I can yank the blanket sharply to my side, what do I care if you catch pneumonia? And what if you fall off the bed?

See posting on Debt workout 101: Games Borrowers and Lenders Play in my blog PPP Lusofonia http://ppplusofonia.blogspot.pt/2011/09/debt-workout-101-games-borrowers-and_13.html

Then, after cutting the existing debt down to a manageable size, we need to determine what needs to be done for the weak net borrowers just to live normally, much less to pay back the excessive and unsustainable debt.

Krugman got his Nobel prize for studying the impact of economies of scale on the skewed distribution of the gains from trade between the big strong center and the small weak periphery...

NL among top ten surplus countries disse...

Dutch may be considering withdrawing from the Euro?

Maybe a CAB surplus of over 7% of GDP is not good enough.

PPP Lusofonia disse...

It is more useful to understand the Eurozone crisis as a single trade and balance-of-payments crisis, since it helps to explain why the Euro is still sickly and what needs to be done to cure it. Shambaugh's "three crisis" can be better seen as consequences of the diverging trade imbabalances: surplus country banks overextended themselves lending to the net importing countries, which became overleveraged with execessive external debt, leading to a ratings collapse and a sovereign-debt crisis. The unsustainable trade imbalances also provoke growth crises eventually, first in the net importing countries, and eventually in the net exporting countries, as importers have to cut back.

This view leads to the conclusion that cutting intra-Eurozone trade deficits, AND SURPLUSES, is a more important part of the solution than "fiscal federalism", even if that were politically possible.

Not that cutting trade deficit/surplus imbalances will be easy. While Portuguese exporters are struggling to find scarce pre-export finance, Lisbon newspapers greedily reported the news that German banks will step up the financing of automobile imports, after new car sales in Portugal fell by more than 50%.

There is no debt by immaculate conception disse...

Overextended ceditor countries such as Germany and the Netherlands are just as responsible for the excessive Eurozone debt crisis as the overleveraged borrowers such as Greece, Portugal or Ireland. It takes (at least) two to get into hock. There are no virgin borrowers, no debt by immaculate conception.
German, Dutch, French and British banks reached leverages of more than 50X lending the the Eurozone periphery because their Central Bank regulators failed to regulate.
Even now, German banks want to increase lending to Portugal... to finance more automobile imports ... from Germany. Portugal already has the highest percentage of BMWs outside of Germany.
Portugal can still get credit to import more, but Portuguese export companies can't get funding to buy the inputs they need to fill their export orders, in part because there is no European EXIMBANK to help small exporters like us.

PPP Lusofonia disse...

Having had more than two years to cut the exposures of over-extended British based banks to the over-leveraged periphery borrowers thanks to the substitute funding from the ECB, Cameron can now speak lightly about restisting the "crisis on our doorstep".

That's what we call in Portuguese, "cantar de galo".

German export record disse...

It's always good to check the numbers. Here are Germany's 2011 exports as reported on 8-Feb-12 by the BBC:
Total exports = EUR 1,050 bln (+11.4%)
non-EU = EUR 432.8 bln (+13,6%)
EU = EUR 627.3 bln (+9.9%)
Eurozone = EUR 420.9 bln (+8,6%)

In the past,the Eurozone accounted for about 50% of the German trade surplus, which is UNSUSTAINABLE.

BIS on imbalances disse...

Global current account imbalances bringing the prospect of disorderly exchange rate adjustments and protectionism. But the imbalances in gross financial flows dwarf the net movements commonly associated with the current account, facilitating the transmission of shocks across borders.
Cross-border financing makes rapid credit growth possible even in the absence of domestic financing.
Areversal of strong cross-border capital flows can inflict damage on financial systems and ultimately on the real economy.



Countries will need to implement policies that strengthen prudential frameworks and the financial infrastructure. Capital controls, best left as a last resort, can offer only temporary relief.

While adjustment by surplus and deficit countries is necessary and mutually beneficial, it is constrained by a fundamental problem: countries may find UNILATERL ADJUSTMENT TOO COSTLY.

This means that international coordination is essential to break the policy gridlock.

Albertin disse...

...sharing a common currency enhances the volume of bilateral trade among countries. However, the more economically dissimilar is an accession country, compared to the original members of a currency union, the smaller are the gains in trade that would follow the enlargement of a currency union.

Persistent divergence disse...

The Bundesbank is studying the lack of adjustment of external imbalences within the Eurozone.

Lots of formulae, few insights.

Divergence persists especially when banks are allowed to recycle the CAB surpluses with no down-side credit risks causing tsu-moneys into the defict/debtor countries.
This requires combined analysis of the current and capital accounts to see the extent of the distortions.
Where will the external imbalances end?
http://ftalphaville.ft.com/2013/12/05/1714032/bundesbank-so-about-those-current-account-issues/