Awwal 12, 1432 H/Feb 15, 2011, SPA -- Export champion Germany said Tuesday that trade surpluses should not be targeted in the same way as deficits, a sign that the Group of 20 rich and developing countries are likely to clash over how to smooth out global imbalances when they meet this week. Like the G-20, the European Union is trying to even out trade flows, claiming large surpluses by some eurozone nations helped fuel bubbles in deficit countries and contributed to the debt crisis that has crippled the region over the past year. The EU says surplus countries like Germany should boost internal demand _ that is, spending by companies and households_ which would raise exports from other countries. At the same time, many economists argue that German banks invested the huge capital surpluses amassed by savers and export companies in overheating economies such as Ireland or Spain, leaving the lenders with dangerous exposures to now-struggling countries. But Germany, which like China has been exporting much more than it has been importing in recent years, rejects any claims that its strong export policies are fueling dangerous imbalances. «One has to clearly distinguish deficits from surpluses,» AP cited German Finance Minister Wolfgang Schaeuble as saying at the sidelines of a meeting of European finance ministers in Brussels. He said Germany's surplus was «not an obstacle to growth in other countries. Instead we are to some degree assuming the function of a locomotive for the euro area.» The debate over global imbalances lost some of its momentum after a meeting of G20 leaders in Soul last year failed to come up with clear commitments.
