This DIW publication, which is unfortunately not available in English in full version, makes the point that Germany's foreign investments--which accumulate as flip side of the current account surplus--fared quite badly during the crisis. The report goes so far to say that "some of the net valuation losses of German firms and individuals could have been prevented if their savings had been invested in long-term assets either in Germany or abroad." Ouch! Slap in the face of the German saver!
First a word of caution. Valuation changes are calculated as the residual between year end stocks and flows, which is a fairly coarse measure. Breaking it down even further into portfolio investments, FDI, and other makes things worse. The authors acknowledge that reading sense from the spiky charts is no fun, and error margins are large.
However, the authors' finding of large valuation losses could also be read through the lens of the IMF's publication "Towards a Fiscal Union for the Euro Area". This provides a different spin. The IMF's analysis suggests that risk sharing between countries in Europe in response to asymmetric shocks has been comparatively low (see figure). Financial linkages in Europe are found to be more limited than across US states, and cross border credit tends to freeze, which worsens crises.
This interpretation leads to the opposite conclusion: higher fiscal and financial integration in the euro area should reduce the impact of shocks on asset valuations, and thus Germany's foreign wealth. In other words, failure to provide appropriate backstops and drive deeper integration has pushed higher losses on German investors. Bang!
PS: It is unfortunate, that the publication is not available in English in full, and that the English translation of the abstract is not as punchy as its German version, which resonates well with the German press: "Wohlfahrtsverluste fuer die kuenftigen Generationen Deutschlands" (welfare losses for future German generations) got diluted to "lower future domestic welfare". Come'on, don't chicken out!
