Why Global Imbalances matter

The Eurointelligence Podcast

Wolfgang Munchau

News, Eu, European Politics, Political Economy, Italy, Brexit, Recovery Fund, Political Risk, Business, European Union, Netherlands, Ecb, Economics, Uk, Fiscal Union, Government, Transatlantic Relations, European Integration, France, Geopolitics, Eurozone, Banking, China, Spain, Germany, Political Union, Politics, Trade, Eu-china

4.5 • 30 Ratings

🗓️ 16 May 2025

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

In our latest podcast, our team discusses the Trump's administration assault on global imbalances, on cooperative and non-cooperative solutions, and what happens if there is none.

Transcript

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0:00.0	Welcome to the Euro Intelligence Podcast. I'm Wolfgang Munchau and with me, Azanamunshank and Jack Smith.
0:06.2	Today we will talk about global imbalances. The U.S. Treasury Secretary Scott Besant said that he was
0:14.1	looking forward to a big rebalancing exercise going on between China and the United States. He called it a big, beautiful rebalancing exercise going on between China and the United States.
0:21.9	He called it a big, beautiful rebalancing.
0:24.8	And while he is in the business of political marketing, we are not.
0:28.4	So we will discuss today whether this rebalancing is, A, going to happen, whether it's going to be big, and whether it's going to be beautiful.
0:37.3	The idea, the basic idea behind this whole theme, and most readers will not have that on their
0:42.7	radar screen, because we're talking about, you know, the media especially, talk about tariffs.
0:47.0	They talk about goods.
0:47.9	And for them, global relationships, into commercial relationships, is all about exports and imports.
0:53.5	Politicians talk about this.
0:54.8	Economists care about little else. So this is, unsurprisingly, the main subject of debate.
1:02.0	But the balance of payments is called a balance of payment for a reason because it has a goods
1:06.6	side. It has a financial side. Older economists talk about the current account and the capital
1:10.8	account. Modern economists or modern financial account talk about a financial site. Older economists talk about the current account and the capital account. Modern economists or modern financial accountants talk about the financial account. The
1:15.5	capital account still is there but has a slightly different meaning. There is a confusion about
1:20.0	this, but ultimately the financial account and the current account are in balance. Whatever
1:25.6	surplus we have in one, we have a deficit in the other. Again, there's
1:30.4	confusion because different countries account for this differently in China and Europe. We have
1:35.0	different rules of whether one has a minus sign in front of it and the other one has a plus sign.
1:38.7	But the point is that the magnitude of the two is the same. And when we have a current account
1:43.7	surplus, as we Europeans do,
	...

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