Eurozone countries like Italy, Spain and Greece have had trade deficits with Germany since at least 1980 - 20 years before the euro launch.
The International Monetary Fund (IMF) says the euro is a continuation rather than a structural break and the Fund's statistics show that since 1999, Germany's trade surplus with the rest of the world has grown faster than its surplus with the other Eurozone countries -- and faster still with European nations that have not adopted the euro. The 2011 German trade statistics to November confirm this.
Finfacts Dec 2014: German per capita standard of living highest in Europe; Ireland below EU average - link to the myth of fast economic convergence
In 1980 when Greek debt to GDP (gross domestic product) was at 30% (just before the decade when it went crazy), trade was almost in balance. Since then the value of German imports from Greece hardly changed until 2005 while exports from Germany quadrupled.
In 1980, Germany's exports to Italy as a ratio of imports was 111%; in 2010, it was 130%.
Without FDI (foreign direct investment), Ireland would be in the same position.
Over the past hundred years, the German economy only during the Hitler regime (1933-45) did not rely on exports. Between 1910 and 1913, exports accounted for 17.8% of Germany's GDP. Their share declined to 14.9% in the second half of the 1920s and fell to only 6% in the second half of the 1930s, but by 1950 accounted for 9.3% of West Germany's GDP. Once the postwar economic boom got under way, exports rose to 17.2% of GDP in 1960, to 23.8% in 1970, to 26.7% in 1980, and to approximately 33% in 1990.
In 2010 the following were the export/GDP ratios: Germany 47%; UK 29%; Italy 27%; France 25%; Spain 26%; Greece 22%; US 13% and Ireland 's was 99%.
The international trading market has changed significantly since the end of communism in Eastern Europe and China's decision in the late 1970s to open its economy to private enterprise/ foreign investment.
Developing new export markets is a long-term challenge and seldom easy.
Germany has both strength in industry and also in the food and drink sectors. Its companies have an unrivalled reputation for quality.
The Economist's Schumpeter columnist wrote in November 2010:
On November 18th Bernd Venohr, of the Berlin School of Economics and Law, gave a fascinating talk on the “secret recipe” of the country’s Mittelstand at the second annual Peter Drucker Forum in Vienna. Last year Hermann Simon, of Simon-Kucher & Partners, a consultancy, published an even more gripping sequel to his 1996 book on “Hidden Champions”. Put the two together and you get a good idea of the management theory at the heart of Germany’s success.
Although the term Mittelstand is sometimes applied to quite small, parochial firms, the most interesting ones are rather bigger and more outward-looking. Most shun the limelight: 90% of them operate in the business-to-business market and 70% are based in the countryside. They are run by anonymous company men, not hip youngsters in T-shirts and flip-flops. They focus on market niches, typically in staid-sounding areas such as mechanical engineering rather than sexy ones like software. Dorma makes doors and all things door-related. Tente specialises in castors for hospital beds. Rational makes ovens for professional kitchens. This strategy helps them avoid head-to-head competition with global giants (“Don’t dance where the elephants play” is a favourite Mittelstand slogan). It has also helped them excel at what they do.
Globalisation has been a godsend to these companies: they have spent the past 30 years of liberalisation working quietly but relentlessly to turn their domination of German market niches into domination of global ones. They have gobbled up opportunities in eastern Europe and Russia. They have provided China’s “factory to the world” with its machine-tools.
The Mittelstand dominates the global market in an astonishing range of areas: printing presses (Koenig & Bauer), licence plates (Utsch), snuff (Pöschl), shaving brushes (Mühle), flycatchers (Aeroxon), industrial chains (RUD) and high-pressure cleaners (Kärcher). Kärcher’s dominance of the high-pressure market is so complete that in 2005 Nicolas Sarkozy caused a scandal, after a spate of riots, by calling for a crime-ridden banlieue to be cleaned out “au Kärcher”.
2008 presentation: How Germany's mid-size companies get ahead and stay ahead in the global economy [pdf]
Germany has a stronger economy than France but half the percentage of young adults with a college degree.
Grover J. "Russ" Whitheurst, a senior fellow at the Brookings Institution think-tank in Washington DC, commented last year that France had increased its percentage of young adults with college degrees by 13 percentage points in the previous ten years whereas Germany’s output of college graduates had hardly budged, yet the economic growth rate of Germany has exceeded that of France over this same period.
BusinessWeek magazine said in 2010 that Germany's apprentice system, which doesn't have an equivalent in the US, ensures that Mittelstand companies have a steady flow of qualified workers. They take on 83% of all apprentices in Germany, more than their share of total employment. The apprenticeship system has roots in the Middle Ages, when master craftsmen across Europe taught young men the skills of stonemasonry, carpentry, and roof-making.
The Washington Post reported in 2010 that some of Germany's most dramatic trade growth has been with the East European nations, like Poland, that opened themselves to market capitalism after the fall of the Berlin Wall -- a development that Germans were well positioned to exploit.
Trade between Germany and the former Czechoslovakia, for example, was a few billion dollars annually before the country was dissolved in 1992. Trade between Germany and the Czech Republic grew to more than $80bn in 2008. Trade with Slovakia, which recently adopted the euro, is around $20bn and last year provided Germany with a $1bn surplus. The Czech Republic and Slovakia both joined the European Union in 2004.
BusinessWeek had said the 33 Chilean miners trapped in a copper mine 2,300 feet below the earth's surface in 2010 were relying on a tiny German company more than 7,000 miles away to help get them out.
Micon, a family-owned firm with about 60 employees in the northern town of Nienhagen (population 6,300), designs and builds the precision tool that is aiding the rescue effort for the men, who became stuck after a cave-in.
The Washington Post said: "Buy a bottle of champagne and it puts money in the pocket of Schneider and Co., a family-owned manufacturer that from a remote perch in the German countryside has created a global monopoly on the wire cages that secure the corks on sparkling wine. Obscure in a country of marquee exporters such as Mercedes-Benz and Siemens, the company's international focus is common among small and often family-owned firms in Germany.
Schneider's highly automated plants (in Germany) and in Italy, Spain and Brazil churn out 2bn of the devices a year. Its dominant market share -- amassed over 30 years -- helps explain Germany's complex and controversial role in the European economy."
Struggling economies will have to find ways to improve their export portfolios. However, matching Germany's export powerhouse is a tall order.