Germany has also faced international criticism for its trade surplus, which means its exports outweigh its imports, as some see it as unfair, imbalanced and a cause for protectionism elsewhere.
However, Germany saw the first decline in its trade surplus since 2009 last year. Data from the Federal Statistics Office showed that trade surplus dropped to $300.9 billion in 2017 from the record high seen in the previous year at $304.44 billion.
The euro zone’s largest economy still had room for improvement, Flassbeck told CNBC’s Steve Sedgwick on the sidelines of the European House Ambrosetti Forum in Italy.
“Germany is really out there as the main culprit, so to say, because Germany has the highest surplus, much higher than China in terms of GDP… Germany has to do something against it, that’s absolutely clear,” Flassbeck said.
Last month, Chancellor Angela Merkel said that Germany’s trade surplus has been narrowing due to higher domestic demand. She added that Germany will continue to work towards that trend, but there are factors, such as oil prices and currency levels, that it cannot control.
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