Bloomberg: German Exports Undercut Trichet’s Weaker Euro Push - by Mathew Brown

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A decade after the euro replaced the deutsche mark, Germany’s export-driven recovery is undermining European Central Bank President Jean-Claude Trichet’s efforts to slow the currency’s record rise. The euro’s “pain threshold is associated with new record highs, so we would need to go above $1.60,” Goldman Sachs’ Stolper said. “Demand for German goods depends a lot more on global growth and investment patterns than on the strength of the euro.” Rising debt loads for the region’s countries may cause the euro to depreciate once growth takes hold, said Otmar Issing, the ECB’s former chief economist. The zone’s budget deficit will swell to a record 6.9 percent of GDP next year, from 6.4 percent in 2009, with all 16 countries breaching European Monetary Union limits as they pump cash into their economies, the European Commission forecast Nov. 3. Spain, Greece and Ireland will have shortfalls of 10 percent or more this year and next, it said.