Germany's export dominance: Is the pressure on the economy growing?

Germany's export dominance: Is the pressure on the economy growing?

On July 8, 2025, German economic policy will increasingly come into the public eye. An article in the Handelsblatt critically examines Germany's dominant export figures, which are increasingly perceived as a problem for other EU states. This is happening for the first time in a leading German medium, which underlines the relevance of the topic. The article entitled “Black-Red is looking for a new economic model” discusses proposals from Friedrich Merz to transform the German economy away from its dependence on exports and towards promoting domestic demand. But whether this change can be successful remains questionable from the perspective of some economists.

The discussion about Germany's export strength is not new. Loud falter.at The German “export world championship” is based on the disregard of international trade rules, which should be viewed critically. Economist Kurt Bayer and central bank governor Ewald Nowotny share similar views and call for fundamental changes.

Economic impact on the Eurozone

In parallel to these discussions, the EU has been analyzing the challenge of Germany's export surplus for months. Currency Commissioner Olli Rehn plans to make recommendations aimed at strengthening domestic demand in Germany. These measures are primarily intended to improve economic stability within the Eurozone, which is threatened by Germany's export-heavy approach.

Germany's trade surplus has exceeded the reference value of six percent for almost a decade, which has negative consequences for countries with deficits. These deficit countries suffer from higher debt burdens resulting from the unequal trade balance. When discussing Germany's role in the Eurozone, it is emphasized that the country's competitiveness should not be questioned. Instead, the aim is to promote domestic demand through measures such as reducing taxes for low earners and investing in infrastructure.

Sustainable solutions for a balanced economy

Another approach to improving the economic situation in Germany and the Eurozone would be to promote competition in the service sector. This could help reduce economic imbalances. There are currently 16 countries in an imbalance procedure, which highlights the urgency of this issue.

Surprisingly, Germany has so far been spared financial sanctions due to its high export surplus. Finance Minister Schäuble ensured that no fines were imposed. However, this decisive support cannot hide the fact that a rethinking of German economic policy is necessary in order to master the challenges of the present.

In summary, it is clear that German export dominance has not only national but also European effects that urgently need to be addressed. The ongoing discussions and future recommendations will be crucial to how Germany's economic role in the EU will develop.