Abstract
This 2013 Article IV Consultation highlights that Germany’s economic rebound of 2010–11 gave way to weakening momentum during the course of 2012. Although exports to non-European trading partners began to recover by mid-2012, in line with improved prospects in the United States and emerging economies, exports to the rest of the euro area continued to decline as the recession in the region continued. Consumption grew robustly as German unemployment remained near post-reunification lows. The outlook for the remainder of 2013 and 2014 is heavily dependent on a gradual recovery in the rest of the euro area and a sustained reduction in uncertainty.
Fund Relations
(As of June 30, 2013; unless specified otherwise)
Mission: May 21 to June 3, 2013 in Berlin, Bonn, Frankfurt, and Hamburg. The concluding statement of the mission is available at http://www.imf.org/external/np/ms/2013/060313.htm
Staff team: Mr. Lall (Head), Mr. Elekdag, Ms. Ivanova, and Ms. Raei (all EUR), and Ms. Le Leslé (SPR).
Country interlocutors: Bundesbank President Weidmann, Minister of Finance Schäuble, senior representatives at the Chancellery, several ministries, the Bundesbank, BaFin and the staff of the German Council of Economic Experts. Mr. Meyer, Alternate Executive Director, also participated in the discussions. Additional meetings took place with industry, research institutes, law firms, and financial market participants.
Fund relations: The previous Article IV consultation discussions took place in May 2012 and the staff report was discussed by the Executive Board on June 29, 2012. The Executive Board’s assessment and staff report are available at http://www.imf.org/external/np/sec/pn/2012/pn1269.htm
Membership Status: Joined August 14, 1952; Article VIII.
General Resources Account:
| SDR Million | Percent of Quota | |
| Quota | 14,565.50 | 100.00 |
| Fund holdings of currency (Exchange Rate) | 10,259.77 | 70.44 |
| Reserve Tranche Position | 4,305.78 | 29.56 |
| Lending to the Fund | ||
| New Arrangements to Borrow | 3,247.19 |
| SDR Million | Percent of Quota | |
| Quota | 14,565.50 | 100.00 |
| Fund holdings of currency (Exchange Rate) | 10,259.77 | 70.44 |
| Reserve Tranche Position | 4,305.78 | 29.56 |
| Lending to the Fund | ||
| New Arrangements to Borrow | 3,247.19 |
SDR Department:
| SDR Million | Percent of Allocation | |
| Net cumulative allocation | 12,059.17 | 100.00 |
| Holdings | 11,503.56 | 95.39 |
| SDR Million | Percent of Allocation | |
| Net cumulative allocation | 12,059.17 | 100.00 |
| Holdings | 11,503.56 | 95.39 |
Outstanding Purchases and Loans: None
Latest Financial Arrangements: None
Projected Payments to Fund (SDR Million; based on existing use of resources and present holdings of SDRs, as of June 30, 2013):
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.21 | 0.51 | 0.51 | 0.51 | 0.51 |
| Total | 0.21 | 0.51 | 0.51 | 0.51 | 0.51 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
| Forthcoming | |||||
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.21 | 0.51 | 0.51 | 0.51 | 0.51 |
| Total | 0.21 | 0.51 | 0.51 | 0.51 | 0.51 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
Exchange Rate Arrangement
Germany’s currency is the euro, which floats freely and independently against other currencies.
Germany is an Article VIII member and maintains an exchange system free of restrictions on payments and transfers for current international transactions. It maintains measures adopted for security reasons, which have been notified to the Fund for approval in accordance with the procedures of Decision 144 and does so solely for the preservation of national or international security.
Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT)
The Fund assessed Germany against the AML/CFT in 2009. The detailed assessment report was adopted by the FATF in 2010. The assessors found that, while generally comprehensive, Germany’s AML/CFT framework was not fully in line with the standard. Shortcomings were identified with respect to, inter alia, the money laundering and terrorist financing offenses, and AML/CFT preventive measures (including the reporting of suspicious transaction requirements, and customer due diligence requirements). In the 2012 and 2013 follow-up reports to the FATF, the authorities indicated having taken a number of legislative and structural measures during the three years that followed the assessment to address many of the deficiencies identified. They mentioned in particular having broadened the scope of the money laundering offense (by including additional predicate offenses), strengthened the reporting of suspicious transaction requirements, enhanced the identification of beneficial owner requirements, and strengthened sanctions for noncompliance with AML/CFT preventive measures. Remaining deficiencies to be addressed notably include the criminalization of self-laundering and shortcomings in the freezing of terrorist assets.”
Statistical Issues
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is adequate for surveillance. | |
| National accounts Germany adopted the European System of Integrated Economic Accounts 1995 (ESA95) in 1999. The 2005 ROSC Data Module mission found that the macroeconomic statistics generally follow internationally accepted standards and guidelines on concepts and definitions, scope, classification and sectorization, and basis for recording. However, the sources for estimating value added for a few categories of service industries could be improved. A direct source for quarterly changes in inventories, which is an important indicator of changes in GDP over the business cycle, is lacking. There is no systematic, proactive process to monitor the ongoing representativeness of the samples of local units and products between rebases of the producer price index. Government Accounts Comprehensive data reporting systems support the accuracy and reliability of the government finance and balance of payments statistics. However, documentation exists to explain the differences between the general government data in the ESA95 classification and the general cash data on an administrative basis; Germany publishes—through Eurostat—general government revenue, expenditure, and balances on an accrual basis on a quarterly basis (ESA95) and submits annual data for publication in the Government Financial Statistics Yearbook, in GFSM 2001 format. Monthly data are only disseminated on a cash-basis. Balance of Payments Accounts The Bundesbank compiles the balance of payments in close cooperation with the Federal Statistical Office. Balance of payments is compiled according to the Balance of Payments Manual, fifth edition (BPM5) and the legal requirements of the ECB and Eurostat. Financial Soundness Indicators Germany is participating in the Coordinated Compilation Exercise for financial soundness indicators (FSIs). In 2006, as part of this exercise, the German authorities compiled a comprehensive set of FSI data and metadata. There are, however, substantial lags in the publication of some of the financial soundness indicators such as nonperforming loans. In addition, the quality of data on bank exposures submitted to the BIS needs to be improved, including provision of the data on ultimate risk basis for advanced countries. | |
| II. Data Standards and Quality | |
| Subscriber to the Fund’s Special Data Dissemination Standard since December 2, 1996. | Data ROSC is available. |
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is adequate for surveillance. | |
| National accounts Germany adopted the European System of Integrated Economic Accounts 1995 (ESA95) in 1999. The 2005 ROSC Data Module mission found that the macroeconomic statistics generally follow internationally accepted standards and guidelines on concepts and definitions, scope, classification and sectorization, and basis for recording. However, the sources for estimating value added for a few categories of service industries could be improved. A direct source for quarterly changes in inventories, which is an important indicator of changes in GDP over the business cycle, is lacking. There is no systematic, proactive process to monitor the ongoing representativeness of the samples of local units and products between rebases of the producer price index. Government Accounts Comprehensive data reporting systems support the accuracy and reliability of the government finance and balance of payments statistics. However, documentation exists to explain the differences between the general government data in the ESA95 classification and the general cash data on an administrative basis; Germany publishes—through Eurostat—general government revenue, expenditure, and balances on an accrual basis on a quarterly basis (ESA95) and submits annual data for publication in the Government Financial Statistics Yearbook, in GFSM 2001 format. Monthly data are only disseminated on a cash-basis. Balance of Payments Accounts The Bundesbank compiles the balance of payments in close cooperation with the Federal Statistical Office. Balance of payments is compiled according to the Balance of Payments Manual, fifth edition (BPM5) and the legal requirements of the ECB and Eurostat. Financial Soundness Indicators Germany is participating in the Coordinated Compilation Exercise for financial soundness indicators (FSIs). In 2006, as part of this exercise, the German authorities compiled a comprehensive set of FSI data and metadata. There are, however, substantial lags in the publication of some of the financial soundness indicators such as nonperforming loans. In addition, the quality of data on bank exposures submitted to the BIS needs to be improved, including provision of the data on ultimate risk basis for advanced countries. | |
| II. Data Standards and Quality | |
| Subscriber to the Fund’s Special Data Dissemination Standard since December 2, 1996. | Data ROSC is available. |
Germany: Table of Common Indicators Required for Surveillance
(As of June 10, 2013)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state an local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.
Germany: Table of Common Indicators Required for Surveillance
(As of June 10, 2013)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | Memo Items | ||
|---|---|---|---|---|---|---|---|
| Data Quality– Methodological soundness9 | Data Quality– Accuracy and reliability10 | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | April 13 | May 13 | M | M | M | ||
| Reserve/Base Money2 | April 13 | May 13 | M | M | M | ||
| Broad Money2 | April 13 | May 13 | M | M | M | ||
| Central Bank Balance Sheet | April 13 | May 13 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | March 13 | April 13 | M | M | M | ||
| Interest Rates3 | June 13 | June 13 | M | M | M | ||
| Consumer Price Index | April 13 | May 13 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing4 – General Government4 | Q4 12 | May 13 | Q | Q | Q | LO, LO, LO, O | O, O, O, O, O |
| Stocks of General Government and Government-Guaranteed Debt6 | December 12 | May 13 | A | A | A | ||
| External Current Account Balance | March 13 | May 13 | M | M | M | O, O, LO, O | O, O, O, O, O |
| Exports and Imports of Goods and Services | March 13 | May 13 | M | M | M | ||
| GDP/GNP | Q1 13 | May 13 | Q | Q | Q | O, O, O, O | LO, O, O, O, O |
| Gross External Debt | Q4 12 | May 13 | Q | Q | Q | ||
| International Investment Position7 | Q4 12 | May 13 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state an local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.
Germany: Table of Common Indicators Required for Surveillance
(As of June 10, 2013)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | Memo Items | ||
|---|---|---|---|---|---|---|---|
| Data Quality– Methodological soundness9 | Data Quality– Accuracy and reliability10 | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | April 13 | May 13 | M | M | M | ||
| Reserve/Base Money2 | April 13 | May 13 | M | M | M | ||
| Broad Money2 | April 13 | May 13 | M | M | M | ||
| Central Bank Balance Sheet | April 13 | May 13 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | March 13 | April 13 | M | M | M | ||
| Interest Rates3 | June 13 | June 13 | M | M | M | ||
| Consumer Price Index | April 13 | May 13 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing4 – General Government4 | Q4 12 | May 13 | Q | Q | Q | LO, LO, LO, O | O, O, O, O, O |
| Stocks of General Government and Government-Guaranteed Debt6 | December 12 | May 13 | A | A | A | ||
| External Current Account Balance | March 13 | May 13 | M | M | M | O, O, LO, O | O, O, O, O, O |
| Exports and Imports of Goods and Services | March 13 | May 13 | M | M | M | ||
| GDP/GNP | Q1 13 | May 13 | Q | Q | Q | O, O, O, O | LO, O, O, O, O |
| Gross External Debt | Q4 12 | May 13 | Q | Q | Q | ||
| International Investment Position7 | Q4 12 | May 13 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Pertains to contribution to EMU aggregate.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state an local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-a-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on January 18, 2006, and based on the findings of the mission that took place during July 5–20, 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning methodological soundness, namely, (i) concepts and definitions, (ii) scope, (iii) classification/sectorization, and (iv) basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 9, except referring to international standards concerning accuracy and reliability, namely, (i) source data, (ii) assessment of source data, (iii) statistical techniques, (iv) assessment and validation of intermediate data and statistical outputs, and (v) revision studies.