Can the crisis between US and Germany wreck the euro?

by Cesare Sacchetti

US-German friendship is “at shreds”. This was the expression used by Daniel Broessler on the German newspaper Süddeutsche Zeitung, to describe the actual condition of the relationship between Berlin and Washington. Despite the dramatic tone, it’s not too far-fetched to say that the USA and Germany are really at loggerheads, a situation not seen since the end of WW2.

The recent delay of the meeting between Mr. Pompeo, US Secretary of State, and the German chancellor, Angela Merkel, is just the latest chapter of a deteriorating diplomatic course between the two countries. Tensions arose since the first steps of Trump’s administration in 2017, when Peter Navarro, assistant to the President and director of the National Trade Council, stated that Germany was taking advantage of a “grossly undervalued currency”, the euro.

The spat between Washington and Berlin went on with the explicit threat by the White House to impose tariffs on EU automotive exports, a measure expected to severely hit the German car exports to the USA. The relations between the two countries dramatically worsened when Trump became president, and it is not by chance. Until the end of the Obama administration, Washington had never changed … Read More