Jens Weidmann: Continental drift? – Transatlantic economic relations in turbulent times

Speech at the Council on Foreign Relations

If our meeting had taken place 200 million years ago, my journey to New York would have been rather short. At that time, all of the land masses on Earth were joined together in the super-continent of Pangaea, including North America and Europe. And New York City, the spot where we are meeting today, would have been at the very heart of our common continent.

Tectonic plate shifts caused Pangaea to break apart and created the world as we now know it.[1] Since then, North America and Europe have been separated by the Atlantic Ocean. Indeed, our continents keep drifting apart by about one inch every year.[2] Unfortunately, this may be true in the figurative sense as well: when it comes to the matter of mutual understanding on both sides of the Atlantic, the gap appears to be expanding rather than contracting.

But there is a big difference between geology and geopolitics: while the continental drift between the United States and Europe cannot be slowed or halted, the political distance between them is neither inevitable nor irreversible. To bridge the divides, we have to talk to each other. That is why events like today’s – and the activities by the Council on Foreign Relations and the American Council on Germany in general – are so important.

I would like to thank you for inviting me here today. It is a great pleasure to be part of a debate with such a distinguished audience. To kick off the forthcoming discussion, I would like to sketch out some thoughts on transatlantic relations from the perspective of a German central banker, in particular on the German current account surplus, trade tensions, and the role of central banks.

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