German exporters are in their element: the ever-strengthening euro (thanks to dollar weakness) is a chance to show their competitive streak. “I’m quite convinced we’ll continue to make up ground in the remaining months of this year,” Anton Börner, president of the BGA exporters’ association, told a press conference in Berlin this morning. Although the currency’s strength was creating “certain problems,” the BGA expected up to 10 per cent export growth in 2010, after a 18 per cent fall this year.
Börner’s confidence reflected the fact the the impact of exchange rate movements is sometimes exaggerated – he reckoned 80 per cent of BGA member’s sales were conducted in euros – and Chinese demand was making up for lost trans-Atlantic exports. But the country’s policymakers have a past history of currency masochism. Peer Steinbrück, the departing finance minister, remained relaxed even as the euro headed towards $1.60 last year.
The result is that there has been little local criticism of the stance taken by the European Central Bank. After meeting eurozone finance ministers late on Monday in Luxembourg, Jean-Claude Trichet, ECB president, stuck firmly to his previous rhetoric that stressed the US’s interest in a strong dollar (but does not explicity refer to the euro’s current strength). I wonder how much longer it will be before the rest of the eurozone steps-up the angst levels?