German finance minister Wolfgang Schäuble agrees with Trump on Euro but not with ECB

Last week, top trade adviser to the Trump administration, Peter Navarro branded Germany as a currency exploiter by suggesting that Germany reaps the most benefits of a devalued euro currency as their own Deutsche Mark would have been higher valued and that wouldn’t have been beneficial to German exporters. These comments came a week after the President of the United States called the European Union, ‘a vehicle for Germany’. Even without the Deutsche Mark, the measures from OECD suggest that the euro is as much as 25 percent undervalued against the dollar. While there was sharp criticism from the German side, finance minister Wolfgang Schäuble seems to agree with parts of it and he didn’t miss the opportunity to take a jab at the European Central Bank (ECB) by blaming them for the devalued currency.

Speaking at a newspaper (Tagesspiegel) interview, Mr. Schäuble said that the ECB monetary policies are too loose for Germany. He added, “The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position…………….When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus . . . I promised then not to publicly criticize this course. But then I don’t want to be criticized for the consequences of this policy.”

Since the inflation started spiking in Germany, the German government has been extra critical of the central bank. The inflation is now hovering just below 2 percent threshold, while the region of Hesse reported inflation of 2.4 percent in January.