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Germany Needs More Than Wage Deal to Address Trade Edge: Chart

Germany Needs More Than Wage Deal to Address Trade Edge: Chart

Germany Needs More Than Wage Deal to Address Trade Edge: Chart

(Bloomberg) -- “Stubbornly low wage increases” over the last two decades have given Germany an advantage in international trade that will keep it in protectionists’ crosshairs and last week’s pay settlements won’t significantly change the situation, according to Bloomberg Economics. The country’s superior competitiveness has led to a current-account surplus of almost 8 percent of gross domestic product -- a source of tension with the U.S., which has Germany on a monitoring list of potential currency manipulators. Bloomberg Economics says that bigger pay settlements for Germany’s workers, or an investment splurge, are required to bring the surplus under control.

To contact the reporters on this story: David Powell (Economist) in London at dpowell24@bloomberg.net, Jamie Murray (Economist) in London at jmurray126@bloomberg.net.

To contact the editors responsible for this story: Sheldon Reback at sreback@bloomberg.net, Zoe Schneeweiss, Fergal O'Brien

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