The return of Angela Merkel to power in Germany has focused attention on the Euro zone, where further action had been put on hold awaiting the German elections. As Table 1 shows, unemployment is still unacceptably high in many southern European countries.
The latest growth figures, shown in Table 2, drive the point home; the economies of the PIGS (Portugal, Italy, Greece and Spain) countries continue to shrink.
Fiscal deficits continue to be high, in spite of austerity, as shown in Table 3, which has made bond markets jittery. Yields on Spanish and Italian debt are well over four per cent, and on Portugal's, nearly seven per cent, as Table 4 shows. Debt-to-GDP ratios, shown in Table 5, continue to be worryingly high. (Click here for tables)
Germany is the outlier in all these sets of data but most of all in its strong current-account surplus, shown in Table 6. Normally, this would have led its currency to appreciate but the common euro doesn't permit that.
A high relative inflation is another automatic corrective to the problem of Germany-led imbalances, and while inflation is higher there than in most of Europe, as Table 7 shows, it might not be high enough.
However, the equity markets do not seem as troubled about Europe as the bond markets. Many European markets have shown high results, as Table 8 reveals.
The latest growth figures, shown in Table 2, drive the point home; the economies of the PIGS (Portugal, Italy, Greece and Spain) countries continue to shrink.
Fiscal deficits continue to be high, in spite of austerity, as shown in Table 3, which has made bond markets jittery. Yields on Spanish and Italian debt are well over four per cent, and on Portugal's, nearly seven per cent, as Table 4 shows. Debt-to-GDP ratios, shown in Table 5, continue to be worryingly high. (Click here for tables)
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A high relative inflation is another automatic corrective to the problem of Germany-led imbalances, and while inflation is higher there than in most of Europe, as Table 7 shows, it might not be high enough.
However, the equity markets do not seem as troubled about Europe as the bond markets. Many European markets have shown high results, as Table 8 reveals.