Far from being a sign of economic well-being, the eurozone’s surplus — $380 billion last year or about 3 percent of the region’s gross domestic product — reflects the monetary union’s deep structural flaws, worsened by the way it addressed its long crisis. [...]
At their last summit in Brussels last month, EU leaders talked disjointedly about the protectionist menace from the U.S. and about their longstanding plans for eurozone reform. But they should have devoted one session to both problems, which are linked.
Europe’s current accounts — which include both the trade of goods and of services — have shown a rising surplus since 2012, after years of being roughly balanced. The surplus rose to 1.5 percent of GDP that year, then climbed every year to reach nearly 4 percent in 2016. [...]
The eurozone surplus doesn’t reflect the strength of the German industrial machine or the supposed virtue of its policies — fiscal or otherwise. It is mostly the result of the eurozone’s structural imbalances. [...]
Spain and Italy are now showing significant surpluses. In each of these countries, the balance has improved (from deficit to surplus) by roughly $100 billion since 2009 — the same as Germany’s accounts, which went from a $200 billion to $300 billion surplus.
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