Swedish business daily, Dagens Industri revisits to mark the books Euro economies - who passed and who failed?
Tuesday, 27 August 2013
The Euro-zone economy is gradually coming out of the water deep, if one was to believe the various news reports and "specialist" analysis being churned out. The Swedish business daily, Dagens Industry, has re-examined the Euro economies and mark their economic books. It is giving its verdict of the four largest European Monitory Union (ENU) economies, France, Italy, Germany and Spain.
Germany, France, Italy, and Spain together account for over three quarters of the EMU economy. The paper has looked closely at the performance of the four economies and has distributed scores and throw in some comments.
Dagens Industry identified that France is the big problem child in Europe and receive a grade of "clear failed."
In giving that verdict, in the comment the paper writes that in the deepest recession since World War II, it is reasonable to see that the production costs should fall, especially when unemployment is as high as 11 percent. But for the French side the opposite is the case. Over the past five years, unit labour costs, i.e., the actual cost to produce in the country has risen by 15 percent, which is amazing because it will simply lead to the erosion of the country's competitiveness further, the paper's economist, Henrik Mitelman, writes.
Next comes Italy, which the paper feels that it has similar problems as France, and also assigned a grade of "fail".
Commenting on the situation of the Italian economic performance, the paper point out that over the past ten years, unit labour costs have risen by over 20 percent, something not expected to happen in a market whose size is shrinking. Costs will not increase when the economy is going backward, according to Henrik Mitelman.
Spain is praised for having succeeded in stemming down its cost of production and for having turned a current account deficit of 10 percent to a small surplus. However, with an unemployment rate of over 25 per cent, they remain unimpressive. The grade accorded to Spain by the Swedes though is "approved".
Germany, also the master of European economy and the biggest Euro-zone economy has impressive leadership in competitiveness and the lowest unemployment rate since reunification. Its grade according by the Swedish leading business daily is a "full pass mark".
By Scancomark.com Team