Financial markets
The euro zone crisis
The export league
Jan 27th 2012, 15:54 by Buttonwood
PATRICK Artus, the chief economist at Natixis, was telling me how Spanish exports were booming so I thought it was worth looking up the data. With austerity on the menu in many countries, the hope is that export growth can compensate for sluggish domestic demand. Of course, since the biggest export market for many European nations is other EU nations, this might seem a lost cause. But at least, there was a general export increase last year.
Top marks to Estonia. The performance of Greece may seem surprising given that it has a huge current account deficit. My colleague who is just back from the country tells me Greek tourism has been doing well, in part because of the political turmoil in Egypt, a rival destination and in part because Israelis are heading for Greece rather than Turkey. Malta and Cyprus may be benefiting from similar effects.
Spain is doing very well on this score and a lot better than France. Ireland's bottom ranking is misleading; it had an export boom rather earlier than the rest and has recorded current account surpluses in three of the last five quarters.
In this blog, our Buttonwood columnist grapples with the ever-changing financial markets and the motley crew who earn their living by attempting to master them. The blog is named after the 1792 agreement that regulated the informal brokerage conducted under a buttonwood tree on Wall Street.
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Some commentators seem confused about the definition of exports.
The trick is to follow the money. If there is money coming into the country, it's an export. So tourism is an export, overseas aid isn't.
Re Greek exports, one should look closer at some changes on how 'fuel products' such as oil for ships has been accounted for lately. There were rumors that changes in accounting for what counts for exported oil have significantly affected Greece's export figures upwards...
Suppose the eurozone was a closed system. There is no mathematical difference between every country exporting 35% of GDP and importing the same figure and every country being a self sufficient autarky with no trade to speak of. But from an economic standpoint, trading has the benefits of specialisation which leads to new synergies and better products and prices. So these countries, by increasing their shared portions of the economy, are contributing to the next big growth spurt, however long that may take to come about...
RBS Boss to Waive £1.4m Bonus. One that got away. Why do labour pretend to care about bank bonuses? In reality they would do NOTHING if they were in office. Conservatives/Labour/Liberals : they all work/would work for the same elite money interests. If you REALLY want change you must vote for someone OTHER THAN the mainstream parties. I thank you Firozali A.Mulla DBA
A little off topic but here's a question: Does foreign aid count as an export?
No!
Yay Ireland! We are probably all still going to die in a fiery financial cataclysm but maybe not.
We just sold our first bonds since the bailout to ease the funding cliff in 2014. We have a current account surplus and we might just survive. Tipping our toes back in the private market. Still are banks might still sink us. 40% of GDP might just be too much. Think the US spending 7 trillion bailing out your banks instead of 700 billion most of which you get back.
Yay Ireland! We are probably all still going to die in a fiery financial cataclysm but maybe not.
We just sold our first bonds since the bailout to ease the funding cliff in 2014. We have a current account surplus and we might just survive. Tipping our toes back in the private market. Still are banks might still sink us. 40% of GDP might just be too much. Think the US spending 7 trillion bailing out your banks instead of 700 billion most of which you get back.
Spain ran a Current Account deficit from Q4 2009 to 2Q 2011.
http://stats.oecd.org/Index.aspx?DataSetCode=MEI_BOP
Regards
That's interesting to think of tourism as an export. That seems like tricky measurement.
It makes sense to me, because tourism is, more or less, outside dollars coming in the form of foreign spending domestically. Since it's not foreign credit in the form of future transfers then I can see the logic.
Maybe I'm off though. Maybe it's not an export, but it does have export like features.
Yeah, I get that part although it amuses me. More or less exporting locale. But I mean it seems hard to measure because an Athenian vacationing on Rhodos is consuming while a Parisian in the next (or, just as likely, in the same) room is importing. A lot of people have to pay attention to make the statistic accurate, particularly because both are paying in the same currency.
Doug,
Have you ever seen those GEICO "caveman" commercials?
http://anconadesigns.com/TH/COMMERCIALS/geico_cheerleader_th.jpg
But an Athenian would pay for the room with a credit card issued by a Greek bank, whereas the Parisian would use one issued by a French bank. We can track that pretty easily. We can also easily track the origins of ATM withdrawals.