A very
quick post today just to get a simple fact across. I’ve been looking at trade
balances for the Euro Area countries the past couple of days.
What was
the cause of “core” Euro Area countries trade surpluses according to
conventional wisdom? Deficits found in peripherals of course. Well, let’s take
a look at the following few charts.
 |
| source: Eurostat |
Trade balances in all peripherals (bar from
Greece for the time being) have not only reversed but have swung to surpluses.
Have core countries’ balances reversed and swung to deficits? No they have not.
Here’s the above chart in absolute terms too.
 |
| source: Eurostat |
I have not included Germany in this one since
the sheer scale of its balance would dwarf those of other countries and reduce
the chart’s usefulness.
I’ve also summed the trade balances of core
countries (i.e. Austria, Belgium, Germany,
Netherlands) and those of peripheral countries (i.e. Greece, Italy, Portugal,
Spain) so that the massive rebalancing that has taken/is taking place is more evident.
 |
| source: Eurostat, own calculations |
It seems to me that core countries’ trade surpluses
are still intact despite the massive (and awfully painful at that) rebalancing
underway in peripheral countries.
P.S. In the aggregates above I have not
included Finland since its own trade balance deterioration is underway since
the early 00s as well as Ireland whose trade balance was always in surplus.
 |
| source: Eurostat |
