US blasts Germany economic policies

The United States sharply criticized Germany’s economic policies on Wednesday for hurting the American and global economy with an export-led growth model.

US officials are worried that Germany and some European nations are using the Euro currency to increase exports and undermine the American economy by making US products more expensive abroad.

The US Treasury Department said Germany should focus more on boosting domestic growth and reduce dependence on exports in order to make the world economy more stable.

“Germany’s anemic pace of domestic demand growth and dependence on exports have hampered rebalancing (of the euro zone economy),” the Treasury said in a congressionally mandated semi-annual report. “The net result has been a deflationary bias for the euro area as well as for the world economy.”

Deflation is one of the most worrisome forces in economics and refers to persistent drops in wages and prices.

Germany has Europe’s largest economy and the world’s fourth largest economy behind the US, China and Japan.

Germany’s surplus grew to $238.5 billion in 2012 from $223.3 billion in 2011 and was the largest among the countries for which the World Bank has data, according to its website.

The Treasury also maintained its past concerns over China, Japan and South Korea’s currency policies.

The US criticism comes less than a month after a political impasse in Washington drove the US economy close to a default, led to a partial government shutdown and triggered criticism from officials from China to Europe, who pointed to it as the single largest threat to global economic growth.

AHT/ARA

Source: Press TV