BERLIN (Reuters) - Germany reassured Brussels on Tuesday its current account surplus, the world’s largest, would shrink in coming years and it was taking steps to boost spending at home, following criticism from the European Commission.
“With the introduction of a minimum wage and public investment in education, research and infrastructure we are stimulating domestic demand and strengthening growth in Germany,” Economy Minister Sigmar Gabriel said in a statement.
“By doing this we are reducing imbalances and taking responsibility for Europe,” he added.
In March the European Commission published a review of the member states it believes have economic imbalances. Under EU rules if such imbalances are considered excessive, a country has to take action or risk a fine.
Germany’s very high current account surplus was an imbalance, the Commission said, but not worrying enough to put Berlin on a watch list, because it was likely to diminish over time.
Germany has had a current account surplus in excess of 6 percent of its gross domestic product since 2007, meaning it exports far more than it imports from the rest of the world.
Gabriel said German goods were in strong demand because of their quality and competitiveness, and Germany’s export strength was also a prop for the European economy.
The German government expects the current account surplus to ease from a present 7.3 percent of gross domestic product (GDP)in the next years. The Commission also estimates it will ease to 6.7 percent of GDP in 2014 and 6.4 percent in 2015.
Reporting by Alexandra Hudson; Editing by Ruth Pitchford