Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

The antidebt consensus did not go entirely unopposed. Peter Bofinger, the maverick Keynesian member of the Wirtschaftsweisen, the official expert advisory committee on the German economy, was scathing in his criticism. If the German federal government was issuing no new bunds, where were German savers to invest the 120 billion euros that they sought to put aside every year? Because the German corporate sector was also generating a financial surplus, they could not on balance invest their funds in German businesses. Rather than funding investment at home, Germany’s savings would out of necessity flow into investments abroad.38 This was the financial counterpart to Germany’s chronic current account surplus, a symptom as much of repressed domestic consumption and investment as it was of export success.