Germany loses leading export place

According to the prestigious German Institute for Economic Research (DIW Berlin), the country lost its leading position in the list of exporting nations. It was not only China that surpassed Germany in terms of exports of goods, but also the US exported more products during 2012. DIW is one of the leading economic research institutions in Germany. Its core mandates are applied economic research and economic policy consulting as well as provision of research infrastructure. As an independent non-profit institution, DIW Berlin is committed to serving the common good. The institute was founded in 1925. Returning to more recent developments the Institute notes that Germany exported a wealth of €1.1 trillion during the twelve month period of 2012. This was a marked increase in relation to 2011, when Germany had exported goods of a value of slightly more than €1 trillion. The export record of 2012 stands as a proof that this country has recovered faster than the rest of Eurozone, from the 2008-2010 credit crunch and sovereign debt crisis. Undeniably exports are the lifeblood of Germany’s economy. Always according to the same source, “Exports have never been as important to the German economy as they are today. The Federal Republic of Germany is much more dependent on exports than countries of comparable size, and their economic significance has increased considerably in the last decade. In 2012, Germany exported goods worth a total of 1.1 billion euros, corresponding to a record 44 percent of its gross domestic product. Although Germany remains the strongest exporting country in Europe, the importance of the euro area as a sales market has been waning since 2000. The economic community has also lost relevance for other EU countries, as it proved to be comparatively less receptive even before the crisis. However, the German economy has stemmed the decline in sales in these markets by compensating with growth in Asian markets-primarily China-and trade with new EU member states. In addition to broadening the export base, product groups are becoming more diversified. While machinery and vehicles still account for almost half of German exports and easily make the largest contribution to the foreign trade surplus, other product groups, such as chemical products, have been playing an increasingly crucial role…”. Given that the Institute express authentically the German business community, the observation that the “old” countries of the European Union play a decreasing role in absorbing the country’s exports needs to be further analysed. This may conceal an allegation. It is possible that Berlin wants to say that the European Union’s and more specifically Eurozone’s dependency on Germany may exceed the degree of the German dependency on the rest of the 16 euro area countries. The fact that Germany has managed to broaden its export base and the list of exported products may signify that this country is progressively emancipating itself from the Eurozone bonds. This allegation however cannot change the fact that the rest of Eurozone countries still account for the majority of German exports. This reality taken together with the observation that Germany has based its wellbeing on exports makes the bond with the Eurozone irreplaceable.