The United States is not grateful towards the European Union for financing its deficits

The E uropean Union has replaced China as the main source of financing for the United States’ external and fiscal deficits. The United States is not grateful towards Europe for this financing, since it protests against Europe’s external surplus with it. Yet Europe’s surplus and its financing of US deficits are related, as was the case previously with China, which financed the US external deficit by buying US Treasuries. China no longer does this but the European Union does (in reality, Germany does). The United States should understand the link between its external deficit with the EU and the EU’s financing of its external and fiscal deficits .