US Picks New Fight With Germany— on Economics

As if US-German relations weren't fraught enough already, the US Treasury savaged the eurozone powerhouse in its semiannual currency report yesterday, complaining that "Germany's anemic pace of domestic demand growth and dependence on exports" have hurt the EU's struggling members, and created "a deflationary bias for the euro area as well as for the world economy." The Wall Street Journal calls the language "unusually sharp," and notes that Germany was given the prime target space normally reserved for China.

Germany fired back, calling the report "incomprehensible." German employment is at a record high, one lawmaker close to Angela Merkel pointed out. "The US government should critically analyze its own economic situation," and work on reducing its debt, he argued. Quartz notes that the US is hardly alone; many analysts have said that boosting domestic demand in Germany would help its neighbors. The US has quietly voiced these concerns to German officials for years, the Journal reports, but barely mentioned them in its last currency report in April. (More eurozone stories.)