But it would be the right thing to do, in my opinion. As I mentioned earlier, calls for a more expansive fiscal stance in Germany are informed by hopes of its stimulating effect on overall demand in the euro area. Such an attempt, however, seems likely to disappoint.
As the import content of public expenditure is low, spillovers to other euro area countries are likely to be small, even when accounting for equilibrium effects. 4. Germany’s current account surplus By a similar token, raising public spending in order to reduce Germany’s current account surplus would likely be a futile undertaking as well.