№301. The Macroeconomic Imbalance Procedure and Germany: When is a current account surplus an ‘imbalance’?
№301. The Macroeconomic Imbalance Procedure and Germany: When is a current account surplus an ‘imbalance’?

Author(s): Daniel Gros, Matthias Busse
Subject(s): National Economy, Supranational / Global Economy, Economic policy, Political economy
Published by: CEPS Centre for European Policy Studies
Keywords: Macroeconomic imbalance procedure; Germany; account balance;
Summary/Abstract: The Macroeconomic Imbalance Procedure (MIP) was designed to prevent the emergence of imbalances like the largeand persistent current account deficits that occurred in Spain and Ireland. But within this mechanism, a current account surplus is also viewed as a source of concern. Indeed, last year’s Alert Mechanism Report (AMR), issued by the European Commission signalled an excessive current account surplus for the Netherlands and Luxembourg, while Germany just barely scraped by with a 5.9% surplus, marginally evading the 6% threshold (over a 3-year average).

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