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Before the summer break I gave an interview to the New York-based Global Finance Magazine about what the first German trade deficit in almost three decades means and whether it is reason for deeper worry.

The gist of my argument is that the German public has long fetishised its current account surpluses as a sign of strength. It was not. Our research with Iryna Stewen and Michael Stiefel highlights that high surpluses actually reflected some of Germany’s structural weaknesses and were far from being an unmitigated sign of strength. That also means that a one-off deficit is nothing to worry about. But could the move into deficit reflect deeper challenges to Germany’s growth model? This is indeed likely to be the case. Read the full article here: