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Recent Data Continues to Show Multi-Speed Europe

February 1, 2011
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One of the main arguments about the causes of the crisis in the Eurozone is that the northern economies are much more competitively than their southern neighbors.  As a result, some economists have argued that Germany needs to retool its “engine of economic growth” from exports more towards domestic consumption.  As the below chart showing the most recent trade data demonstrates, despite the fears over the euro, northern Europe’s firms are still exporting.  Of the eight largest trade surpluses (shown in blue) of the 27 EU member states, seven are Nordic and/or have strong ties with Germany.  In order of size, they are Finland, Germany, Estonia, Sweden, the Netherlands, Denmark, Luxembourg, and Bulgaria.  Conversely, of the “PIIGS”, all have trade deficits except for Ireland (denoted by “IE”), with Portugal having the third largest deficit, Greece is 5th, Spain is 7th, and Italy is 9th.

EUROSTAT also released data on the international trade is services (shown in red).  While the data is much less clear than with the trends for trade in goods, the graph does show one clear trend—a few small countries thrive in the trade of services.  It should not be too surprising that this accounts for a large portion of the Cyprus, Malta, and Luxembourg economies.

In a related story, EUROSTAT also released unemployment data today, and in general the trends minor those of the trade data.  For instance, Sweden, Germany, and Finland recorded three of the four greatest decreases in unemployment (Malta was the fourth).  On the other hand, Greece was highlighted as one of the four countries with the largest increases in unemployment, and Spain retains the highest level at 20.2%.  Strangely, Bulgaria (designated as “BG”) saw unemployment jump from 8.6% to 10.1%, despite being the “best” performer on the above graph.

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