EU Economies Still Growing at Different Rates
EUROSTAT recently released the statistics on the change in GDP in the EU for all 27 member states for the third quarter of 2011, as well as more complete data on the second quarter. As the below graph shows, the divergent paths of the European economies continues. Some economies, particularly in the northwestern part of the EU are booming. Estonia leads the pack, with growth rates of 9.5%, 8.4%, and 7.9% for the first three quarters, respectfully, compared to 2010. At the other end is Greece, whose economy continues to contract. So far in 2011, its economy has shrunk by 8.3%, 7.4%, and 5.2%, respectfully compared to a year earlier.
In addition, while EUROSTAT reported that GDP grew by 1.4% in both the Eurozone and the total EU of 27 members, there appears that in general the countries not using the euro are growing faster. Of the five countries that recently saw rates above 4%, only Estonia uses the euro. At the other end of the spectrum, of the five laggards, four use the euro and are part of the PIIGS group. I exclude Romania from this group as its economy actually shot up in the 3rd quarter, growing at 4.5% (the 4th fastest rate for the 3rd quarter). The slowest non-Eurozone country is the UK, whose size probably also decreased the gap between euro and non-euro countries.
Speaking of the PIIGS, yet again Ireland appears that it might be exception, as its economy actually grew by more than 2% while the other four members of the group showed at best lackluster growth. Unfortunately, this data does not appear to indicate the other PIIGS will be able to grow their way of out their current problems anytime soon.