February 13, 2017
by Marcel Fratzscher
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Curse of the Trade Surplus

This text was published in Handelsblatt Global Edition on February 13, 2017.

The criticism of Germany’s trade surpluses by the U.S. government has caused collective indignation here at home. Much of the criticism is not fair. Accusations that Germany manipulates the euro and misuses the European Union for its own interests are unwarranted. But there is also a kernel of truth that our European neighbors have been voicing for a long time: Germany’s trade surplus is tantamount to protectionism. That’s

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July 21, 2016
by Marcel Fratzscher
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Statement on today’s meeting of the Council of the European Central Bank (ECB), July 21, 2016

The European Central Bank is facing a difficult dilemma. The slower the euro area economy is growing, the lower interest rates and the harder it becomes for the ECB to implement its public sector purchase program. The ECB has assumed a wait-and-see strategy in the hope that its new measures will be effective and the economy will not deteriorate further. Italy’s banking crisis, more than the Brexit, is an enormous risk for the entire euro area, also for Germany, and

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June 27, 2016
by Marcel Fratzscher
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Making the Eurozone more resilient: What is needed now and what can wait?

This article was first published on VOXEU.org on June 25, 2016. 

Britain voted to leave the EU. This is terrible news for the UK, but it is also bad news for the Eurozone. Brexit opens the door to all sorts of shocks, and dangerous political snowball effects. Now is the time to shore up the Eurozone’s resiliency. The situation is not yet dire, but prompt action is needed. This VoxEU column – which is signed by a wide range of

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June 24, 2016
by Marcel Fratzscher
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Statement on the result of the Brexit referendum

The Brexit decision is a catastrophe for all Europeans. The economic costs will be enormous for all of Europe. Britain could slide back into recession. We at DIW Belin expect a 0.5 percentage points lower economic growth in Germany in 2017 as a result of lower German exports to the UK alone. The risk is highest for countries such as Italy, which are vulnerable and could slide even deeper into the financial crisis.
I expect major volatility in financial markets

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June 8, 2016
by Marcel Fratzscher
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Germany’s Strange Turn Against Trade

This article was first published on Project Syndicate on June 6, 2016.

The window of opportunity to complete the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union is closing quickly. National elections will be held this year and next in the US, France, and Germany, and the campaigns will play out in an environment that is increasingly hostile to international agreements in any form. The biggest risk might come from the least likely source:

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August 5, 2015
by Marcel Fratzscher
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Greece’s debt burden can and must be lightened within the Euro

There will be no confidence and no growth in Greece without a solution to the debt problem.

by Armin von Bogdandy, Marcel Fratzscher and Guntram B. Wolff on 5th August 2015

Perhaps the greatest damage caused by the confrontation with Greece is a general loss of confidence. If we want to get Greece back to growth, people, companies and investors have to regain confidence in the viability of the country. For this to work, a legitimate and competent government

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February 3, 2015
by Marcel Fratzscher
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GDP-linked bonds as a key for a sustainable recovery of the Greek economy

The Greek government yesterday proposed the transformation of part of its official debt into GDP-linked bonds. DIW Berlin has published a detailed study, which analyses how such an instrument might work. DIW Berlin considers this proposal as a constructive option to improve debt sustainability, which will ultimately foster a return to economic growth. Such a solution will help Greece accept ownership of its reform prorgramme – which is the key for a sustainable recovery of the economy. It is

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January 15, 2015
by Marcel Fratzscher
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Decision by the Swiss National Bank was Long Overdue

The decision by the Swiss National Bank (SNB) was long overdue. Its exchange rate policy hat protected Swiss exporters and helped their competitiveness through a weaker Swiss franc. But this policy could prove a very expensive mistake, because the Swiss franc will had to appreciate against the euro in the foreseeable future. The valuation losses for the DNB could therefore become substantial. The timing of the decision by the SNB is certainly not a coincidence. The expectations of an ECB

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September 16, 2014
by Marcel Fratzscher
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The German locomotive has become Europe’s liability

This article was first published on ft.com on 27 August 2014.

The news that German output declined in the second quarter has dented the country’s economic euphoria, but only a little.

Many blame the Ukraine crisis and transient factors such as the mild winter, and believe that Europe’s largest economy remains fundamentally strong. They are wrong. Germany’s disappointing performance mostly reflects structural weaknesses, both at home and in the eurozone. Policy makers should act quickly, before the problems become further

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