Germans are immensely proud of their fiscal rectitude and their manufacturing prowess, as they should be. Their achievements nevertheless constitute too much of a good thing, because Europe’s economy, and the world’s, needs new sources of demand. By limiting its own government expenditure and taxing its people stiffly to pay for what it does spend, Germany leaves the role of consuming the world’s goods and services up to others, including Americans, who may not be able to play it indefinitely. This harms neighbors, such as Greece and Italy, who need more markets to help grow their way out of debt; and at this point, it is harming Germany, which now stands uncomfortably close to recession because of its undue dependence on global export markets — which are plagued by uncertainty amid President Trump’s trade war with China.
However tentatively, Germany is starting to get the message. Household and government consumption rose modestly last year, part of a trend toward slightly greater reliance on those engines of growth. The country’s current account surplus could fall below 7 percent of output by 2020, according to the Bundesbank.
Yet old habits, deep-seated ideological commitments — and the political clout of export industries — die hard. Berlin is on course for another budget surplus this year. Germany needs to move boldly toward growth based more on its own domestic needs. What the world needs now is for Germans be a little more selfish. Actually, it could be the most selfless thing they could possibly do.