And on the other side of the coin, there's...... Germany

And on the other side of the coin, there's...... Germany

"Berlin breaks surplus rules with impunity" , The Daily Telegraph, p.B4

In stark contrast to the US and UK, the EC is forecasting that Germany will post a current account surplus this year of 7.9% of GDP, a record for the modern era. It stands accused not investing to stimulate the domestic economy, whilst at the same time profiting (some more acerbic critics might say profiteering) from the misfortunes of its less fortunate, mainly southern, Eurozone partners.

The Germans might argue that they should not be targeted just for doing things better than anyone else...... a fair comment maybe in other circumstances but in this instance misses the point. This is at heart a political issue. Eurozone stability rules state that no current account surplus should exceed 6% of GDP, which Germany's has for the last 5 years. By rights, it should have been made to pay increasingly heavy fines but, to no one's great surprise, has yet to incur any penalty. The point here is that it would seem to confirm to the weaker Eurozone nations that there is one rule for the big boys and another for themselves  --  let's not forget that Germany and France were the first to flout EMU stability rules back in the early 2000's, and nobody did anything about it then either. 

Ambrose Evans-Pritchard argues that the failure to address the issue, and the wider context in which it will be seen, represent the biggest threat to Eurozone stability  --  bigger even than "Grexit" and lack of reform in France and Italy. The EU clearly needs to take strong action, but historically that's never been their strong suit.