http://www.tradingeconomics.com/charts/germany-current-accou...
The current surplus is not a feature of German productivity but the result of having an undervalued Euro and depressed domestic demand.
> The current surplus is not a feature of German productivity but the result of having an undervalued Euro and depressed domestic demand.
The Euro is not really undervalued. The current surplus is a feature of Germany's long term export oriented industry.
How can the Euro be 'under-valued' in Germany?
Not 'at the moment' - Germany has been a strong exporter for almost five decades now...
> then Germany will find itself in real trouble.
Since Germany runs this model since a long time, it has a lot of experience dealing with its effects.
Germany has not had anything like this level of current account surplus before. It is entirely due to mistakes in macro economics (wrong parity within the Euro and a refusal to boost domestic demand).
Sadly Germans seem unable to understand that their surplus is not a sign of economic success, but the result of misguided policies that keep the rest of Europe in recession.
That has a simple reason: Germany is a larger country in a unified Europe now. After recovering from the effects of the reunification, you have now a stronger and larger economy with more and larger trading partners. For the larger export success are a few simple reasons responsible:
* the east european market directly next to Germany is now larger and easier to access. Poland.
* Germany is no 33% larger than before the reunification. Once the added economy started to recover from the effects of reunification and many investments in East Germany were done, the now larger economy, contcentrated back on the european and world market.
* globalization has nicely enhanced the reach of even small companies in rural Germany to trade with even remote locations
> It is entirely due to mistakes in macro economics
That's entirely wrong.
...which in turn strengthens the German position, right? In turn giving them de facto economic success?
In the meanwhile Germany added 20 million people from a collapsed country/economy...
> which created a huge market for German capital goods, which gave Germany a big export surplus.
Germany had an huge export surplus before, during and after it.
> Germany came out the big winner of the euro, therefore its export industry is strong, therefore industry can still engage in long-term investments in its workers
Germany did that before the Euro and is still doing it.
> and the labor unions in Germany are very strong, so they can force corporations to spend on training programs.
The companies are more than willing to train their workers. No unions necessary.
> Germany does a good job training its workers, and therefore the Germany economy is strong, is probably wrong on at least 2 counts: > 1.) it probably reverses cause and effect
There is no 'cause and effect'. It makes much more sense to model economy as a system with multiple feedback loops.
The education and training systems constantly creates new workers with relatively high skill sets. You can guess the effects from that and you can also easily guess why the companies are doing this.
> 2.) the German economy is not really strong
That would not make any sense to say. 80+ million people, fourth largest economy in the world.