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
