Eurozone(and EU) economic revival, positive trends and possibly future boom

[Maximus Zeebra]

The numbers for 2006 have landed in my hand and shows a very positive trend and a continued trend towards a high growth European economy..

Its been 8 years since the EMU and 5 years since the introduction of the Euro currency, something that naturally is a big change in the countries of where it happend. One could not expect an immidiate positive effect, but that the positive effect now is starting to show is earlier than expected.
European growth had a short slump after the introduction of the Euro and the WTC terrorist attacks and the economic slump around the world, but are now finally moving towards where it is suppose to be.

Since the introduction of the Euro, the slow growth and the 9.5% high unemployment levels of 2004, the economic picture has slowly but steadily become better. Now this process is speeding up, and unemployment is already at a 7.5% level across the European Union which include Polish 12.3% unemployment. Eurozone unemployment has fallen from the same level to 7.6% at current.
http://epp.eurostat.ec.europa.eu/pl...REREL_YEAR_2007_MONTH_01/3-31012007-EN-AP.PDF

GDP growth in both the Eurozone and the EU-25 is slowly poiting upwards, from quarter 4 of 2005 until quarter 4 of 2006, the EU-25 growth were the same as US growth of 3.4%, while Eurozone came just below at 3.3%. However, if you look at Germany for example, German economic growth from Q42005 until Q42006 was 3.7% after speeding up. The French economy is also speeding up after a stagnat 3rd quarter, and the French will end up on a dissapointing 2% growth of between the 4th quarters, which is slowing down the Eurozone and the EU-25. Italy had unexpected revival the last quarter of 2006 and outgrew every large economy by a growth rate of 1.1% from previous quarter.
2006 Eurozone and EU GDP growth was far stronger than 2005, ending up at 2.7% and 3.0% repectively.
http://epp.eurostat.ec.europa.eu/pl...REREL_YEAR_2007_MONTH_02/2-13022007-EN-AP.PDF

That is not really the point, the point is the upwards curv in almost every economic indicator which could indicate the start of an economic boom. Europes low inflation(1.9%) and now higher GDP growth is a very healthy sign.
Consumer spending is showing a healthy upwards trend while industrial producer prices are stable and industrial production slowly increasing.

The short term economic indicator of 2006 will show you if you can read it that European growth and positive curves are very likely to continue and speed up as we reach 2010. My expectations and hopes tells me that there is a slight possibility of seeing almost 5% growth in the Eurozone and around the same in the EU-27 in 2010. The negative side tells me that Euro growth and EU-27 growth will pass US growth and outpace it between now and 2010 and beyond. Beyond that the picture seem even more positive, but I am not going to crunch those numbers for myself yet.

I will look forward to the 2007 short term economic indicator, until that you guys can use this..
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-BJ-06-011/EN/KS-BJ-06-011-EN.PDF



The only question left in my mind, WHEN is the economic boom coming? I would guess 2008-2010 it starts and last for possible decades.

 

[MickB]

A bit of economic growth - a cheap return for the heavy sacrifice of independent national sovereignty which was surrendered by the nations of the EU.

 

[skydog1]

Agreed Mick!

 

[EAGLE1]

Maxiumus I think your not really trying very hard to toe the line here. I mean the fact that european economies actually have done pretty well over years is the great unsaid of British and American politics and should be kept so. We've tried for years to be America and have little to show for it. Even now were having to make up for the all the investment we didnt do previously and they did. Im not sure our involement in the currency is such a great thing, but only because not being involved will cost us little while allowing us a certain flexibility - but thats certainly debatable.

 

[MickB]

That's right. The Marshall Plan and Lend-Lease were two great initiatives which helped European nations when they really needed it.

Granted, they were not implemented from a position of charity, but it cannot be understated that the Americans didn't have to do it.

But surprise surprise, now that Europe's economically mobile again, it's once again safe for them to be the usual surly blinkered bunch of ungrateful ingrates it's ever been a Britisher's embarassment to be seen mingling with.

 

[EAGLE1]

Ive missed something here. Im sorry. Can you please point out the relevance of the Marshall Plan and the Lend Lease programme. Or is it that your just seeking to let the Americans know you appreciate them?

 

[MickB]

In 1940 the Americans reckoned on the British being starved and beaten into submission by the Germans by the beginning of 1941. One of Roosevelt's election pledges was to keep America out of foreign wars. However, the American public's hostile attitude to German sinkings of US supply ships to England gave the President a bit of leeway to help Britain anyway, one of the initiatives being Lend-Lease. We had that war on tick and we've just finished paying the bill. At the time it would have been easier for the President to have left Britain to starve and kept America totally isolated until Pearl Harbor.

After the war Europe was completely trashed. Economies, as well as landscapes, were in ruins. America was the only nation to have come out of the war stronger (in every area) than when she went in and with the lowest percentage of lives lost. The American Dream was kickstarted by the industrial surge of WW2. However, to get Europe back on the road to prosperity and security, General Marshall suggested that a series of low interest loans be offered to any nation wanting them, including the USSR. In just five years American companies established a series of markets in major Western European countries. Some people, particularly the Communists who turned down the offers, complained that European citizens were turned into unthinking slaves of a Yankee consumer society-culture, yet the economic boom begun by the Marshall Plan meant that Europe became more confident, prosperous and able to stand up without being propped by foreign aid, as the Soviet satellites largely were.

Indeed, we have a kind of debt of gratitude to America. Not an unthinking one, but a consideration of where America fits into the history of postwar freedom and prosperity.

 

[EAGLE1]

Yes, thanks for the history lesson. Although this stuff is generally taught in most secondary schools as part of the History Higher (Scotland). Im still missing where it fits in with this thread about European econmic prospects. Or is your point that Europe has the US to thank for its prosperity? If so please just say so.

 

[MickB]

I added something to Eagle1's comment earlier on and the posts took off.

Anyway, the original comment was a piece of EU gloss which just needed to be countered.

Why have a single currency to get what any decent government can get on its own?

 

[EAGLE1]

Yes, the current upturn in the eurozone is no proof of the single currency's effectiveness. After all , plenty of countries outside the zone do pretty well too.
However, I still dont get the Marshall Plan stuff etc etc.

 

[skydog1]

Ive missed something here. Im sorry. Can you please point out the relevance of the Marshall Plan and the Lend Lease programme. Or is it that your just seeking to let the Americans know you appreciate them?

Here's a little ditty by way of illustration E1:

Back in the seventies as a young, good-looking, RN matelot, I served at a radio station at the mouth of the Forth/Loch Striven (still there but remotely operated now). Our night out of choice was of course the lovely town of Dunoon or the Royal Bar at Innellan. This place had a bustling thriving economy, mostly on the backs of those perfidious Yank sailors whose boomers tied up in the Holy Loch at their floating supply/repair ship USS Canopus and spent their greenbacks ashore.

I went back there a few years ago since the Yanks withdrew, much to the delight of the CND clowns. Dunoon is sadly a poor reflection of a once prosperous town. So yes, Yanks are good for the economy in more ways than one. And the Marshall plan? Well I suppose we could have just left all those devastated European countries to sit amongst the rubble and ashes starving to death. I'm sure the French would have helped them out. Britain wasn't in any shape to do so being bankrupt and equally exhausted by the war effort.

As for the EU ... let me think, who would I rather be aligned with politically and fiscally the cheese-eating surrender-monkeys of the EU or Uncle Sam for all his faults? Hmmmm.... hard one that. Not.

 

[MickB]

I think your post may have been a little glib to me because I must have construed some other kind of meaning.

 

[EAGLE1]

Hmmm....Im not sure how your post relates to the point of the thread but I will continue the conversation in honour of your lengthy bit of personal history.
On this stuff about American miltary helping Dunoon. Its obvious. However, I wouldnt expect aquiescence off the Germans because the UK has been spending billions keeping numerous regiments stationed there. We were/ are there for our own reasons in the end. Namely stopping the soviets before they reach the coast.
The Marshall Plan gave europe and Britain a much needed kickstart while lend lease kept the UK in the war. However, what provided continued prosperity in the EU was the creation of the European Coal and Steel Community which did so well that we (the UK) were desperate to join for years before we were eventually allowed in.

 

[EAGLE1]

Hmmm....Im not sure how your post relates to the point of the thread but I will continue the conversation in honour of your lengthy bit of personal history.
On this stuff about American miltary helping Dunoon. Its obvious. However, I wouldnt expect aquiescence off the Germans because the UK has been spending billions keeping numerous regiments stationed there. We were/ are there for our own reasons in the end. Namely stopping the soviets before they reach the coast.
The Marshall Plan gave europe and Britain a much needed kickstart while lend lease kept the UK in the war. However, what provided continued prosperity in the EU was the creation of the European Coal and Steel Community which did so well that we (the UK) were desperate to join for years before we were eventually allowed in.

 

[Maximus Zeebra]

I added something to Eagle1's comment earlier on and the posts took off.

Anyway, the original comment was a piece of EU gloss which just needed to be countered.

Why have a single currency to get what any decent government can get on its own?

Hmm, the Euro has is only 6 years old, yet its becoming the most important global currency. The only thing it lacks is the reserve status of the dollar 30% vs 60%. yet 30% in six years. Do you btw know how important a reserve currency is?

Its true that countries had difficulties adopting the Euro, the last 5 years show that, but this period is now over, economies are back on track, and with the Euro instead of national currencies, the economies will boom in a few years.

 

[Maximus Zeebra]

Here's a little ditty by way of illustration E1:

Back in the seventies as a young, good-looking, RN matelot, I served at a radio station at the mouth of the Forth/Loch Striven (still there but remotely operated now). Our night out of choice was of course the lovely town of Dunoon or the Royal Bar at Innellan. This place had a bustling thriving economy, mostly on the backs of those perfidious Yank sailors whose boomers tied up in the Holy Loch at their floating supply/repair ship USS Canopus and spent their greenbacks ashore.

I went back there a few years ago since the Yanks withdrew, much to the delight of the CND clowns. Dunoon is sadly a poor reflection of a once prosperous town. So yes, Yanks are good for the economy in more ways than one. And the Marshall plan? Well I suppose we could have just left all those devastated European countries to sit amongst the rubble and ashes starving to death. I'm sure the French would have helped them out. Britain wasn't in any shape to do so being bankrupt and equally exhausted by the war effort.

As for the EU ... let me think, who would I rather be aligned with politically and fiscally the cheese-eating surrender-monkeys of the EU or Uncle Sam for all his faults? Hmmmm.... hard one that. Not.

You obviously dont see the world economy shifting away from the US, being divided among Europe and then China as something positive. This only means that US influence is decreasing(clearly visible, desperate yanks now) and that the influence of Europe is increasing, and the influence of China increasing.

 

[MickB]

"Hmm, the Euro has is only 6 years old, yet its becoming the most important global currency. The only thing it lacks is the reserve status of the dollar 30% vs 60%. yet 30% in six years. Do you btw know how important a reserve currency is?

Its true that countries had difficulties adopting the Euro, the last 5 years show that, but this period is now over, economies are back on track, and with the Euro instead of national currencies, the economies will boom in a few years."

Well, the economic climate has been favourable and with no small arguments within the Central Bank has this growth of the Euro been attainable.

And if the Euro does indeed prove a truly sturdy currency through bad times too then I say good luck to 'em, if that's how they wanted it. I'm not a vindictive man.

But the political implications are too sizeable to ignore. Unlike the USA, Europe is made of age-old sovereign states with their own cultures, customs and different levels of financial values pegged to their ex-currencies. It's a struggle at the best of times for a French-region exchange rate to be suitable for Romania or Greece. Not to mention the fact that sizeable political schisms can only be papered over when the sea is like a millpond or only slightly choppy.

Come a serious global recession Britain could find it easier to cope than Europe because exchange rates can be adjusted suitably and above all quickly and with as little loss of equilibrium in the market as possible.

But even if in some utopian dream the Euro turns out to be the currency par-excellance, it would still be a struggle to convince the majority of our people to join it because it means being part of that whole Eurofedaralist superstate business even further. We could, however, be promised a re-run of the ERM situation, as long as the same old shambles didn't happen again second time around and that we could escape temporarily or permanently to re-balance our own economy a lot quicker in time of recession.....

 

[skydog1]

You obviously dont see the world economy shifting away from the US, being divided among Europe and then China as something positive. This only means that US influence is decreasing(clearly visible, desperate yanks now) and that the influence of Europe is increasing, and the influence of China increasing.

Hmmm..... No, neither do I think it a good idea that Uncle Sam is being painted into the corner of isolationism (again)

Should the fit hit the shan and US has petulantly taken his ball home and refuses to turn out for the side come the Saturday morning war, you (we) may find it a little awkward to say the least.

 

[Maximus Zeebra]

Well, the economic climate has been favourable and with no small arguments within the Central Bank has this growth of the Euro been attainable.

The economic climate is incredibly favorable. Where else in the world do you have one "country" with such big differences as the EU? This differences are becoming smaller, and the amount of businesses that will be created by this is unlike anything in history. Everyone has a huge opportunity in the EU, everyone from the normal guy with some extra money to spend to the large corporations. Anyone willing to invest. House prices in the EU for a standard house varies from 10.000€ to 500.000€, is this not something normal people can take advantage of for example? The point is that inside the EU, there is a "mini-globalization" going on, and this certainly will be one of the huge advantages of the EU. Do you know that withe the continued growth of the east as it is now, those economies will be up to standard with what those of the west are now(2007) in 10 years? The example here could be Ireland, who was piss poor until they joined the EU, they started slowly growing and then we all know about the celtic tiger. Now its the eastern European tiger, those economies are experiencing a boom, and like Ireland who had meaningless or no import from the UK for example in 1970, Ireland is now one of the UKs most important export partners and comprise over 7% of UK export. This again created jobs in the UK.. Its a domino effect, but its positive.

When the east grows it creates jobs in the west, and its growing enormously, and we can all take advantage of it, because going to some other country in the EU is almost like moving within your own country now.

I have lived and worked in 4 different European countries now the last 3 years, its easy, and the cultural differences you are talking about is decreasing or vanishing completely as Europeans mix. Soon, the only difference will be language, and those few people who insist that nationalism is the best, but the European union is working, and if I let you know everything I know about the European Union, you would be VERY optimistic, and you would become rich.

But I guess you Brits prefer to be skeptics and complain about everything instead of taking advantage. While Brits think there is no advantage, a record number of Englishmen own second houses around Europe, especially in Spain. Hundreds of thousands of Brits have become rich because of Spanish property, millions of Brits have become rich because of the European Union.
But I guess you guys just want to complain about national sovereignty. Be my guest and miss the chance.

Right now, Europe is the most favorable place in the world, its where everyone can make their fortunes, and they are. China is a joke in comparison, globalization is 50-100 years behind.

And if the Euro does indeed prove a truly sturdy currency through bad times too then I say good luck to 'em, if that's how they wanted it. I'm not a vindictive man.

As all the European countries change to the Euro, I am certain the Euro will become the most important and sturdy currency in the world. It will be the symbol of stability while the dollar will be the symbol of speculation.

But the political implications are too sizeable to ignore. Unlike the USA, Europe is made of age-old sovereign states with their own cultures, customs and different levels of financial values pegged to their ex-currencies. It's a struggle at the best of times for a French-region exchange rate to be suitable for Romania or Greece. Not to mention the fact that sizeable political schisms can only be papered over when the sea is like a millpond or only slightly choppy.

Europe, the European Union, what eventually will become the European Federation is a historical experiment, and against all odds its brilliant and works perfect. People in New York have different customs from people in Texas as well, that is no hindrance for the US, actually, living in Texas and NY is more dissimilar than any two EU countries.
Its not French exchange rates, its Euro exchange rates, he ECB is an independent institution. If the Euro is not suitable to Greece its only because Greece is bad at adapting to it, nothing else.

Come a serious global recession Britain could find it easier to cope than Europe because exchange rates can be adjusted suitably and above all quickly and with as little loss of equilibrium in the market as possible.

So you think my friend, but with only one country behind the pound, while several is behind the Euro, I think the Euro has the advantage in this. Countries backing each other up.

Met;
Its like if one apple farm has rotten apples, certainly they can start spraying them and it might help, it might make the apples ok for sale. He might suffer a bad reputation for years or simply bad sales.

Then you have a collection of 13 applefarms, where they have all agreed to take care of each other, one applefarm is having rotten apples, he choose to throw them away and each of the other 12 farms donate a small amount of their apples to him, everyone is happy and the loss is minimal.

But even if in some utopian dream the Euro turns out to be the currency par-excellance, it would still be a struggle to convince the majority of our people to join it because it means being part of that whole Eurofedaralist superstate business even further. We could, however, be promised a re-run of the ERM situation, as long as the same old shambles didn't happen again second time around and that we could escape temporarily or permanently to re-balance our own economy a lot quicker in time of recession.....

Its not a utopian dream, its a utipian reality getting closer and closer. When the Euro is proven a success(max 5 more years), I am sure the negative and sluggish Brits will also join this fantastic adventure. However, I believe they will run both currencies for a very long time when they decide to change.
Why do you need to re-balance the economy in recession? Why not prevent recession in the first place instead, with responsible fiscal policies and steady and sustainable economic progress and reform.

You know what? I personally believe exchange rate mechanism as means to correct the economy is old fashion. The new economy will use laws, especially tax laws to adjust the economy. VAT could be a very interesting and good instrument.

 

[MickB]

Subsidies for farmers to produce nothing, an over-plundered fish stock and vast quantities of produce destroyed to artificially increase its value is an odd way to bring prosperity. Particularly when many European directives have increased tax burdens on many businesses.

And many of us are not convinced that when (and it's always when) recession comes the Eurozone will suffer crashes right across Europe as less productive areas act as dead weights.

But alright. The Euro is an ascending star in the currency markets, doing very well thank you. Well, what's wrong in a compromise by which the Pound can be voluntarily pegged to the Eurozone but with no obligation to permanently surrender national sovereignty or independence? We do, after all, follow European policy directives which take prominence to British law anyway.

That way we could sample for ourselves this glossy new Euro-future without becoming a culturally bereft Euro-province.

 

[Maximus Zeebra]

Subsidies for farmers to produce nothing, an over-plundered fish stock and vast quantities of produce destroyed to artificially increase its value is an odd way to bring prosperity. Particularly when many European directives have increased tax burdens on many businesses.

And many of us are not convinced that when (and it's always when) recession comes the Eurozone will suffer crashes right across Europe as less productive areas act as dead weights.

But alright. The Euro is an ascending star in the currency markets, doing very well thank you. Well, what's wrong in a compromise by which the Pound can be voluntarily pegged to the Eurozone but with no obligation to permanently surrender national sovereignty or independence? We do, after all, follow European policy directives which take prominence to British law anyway.

That way we could sample for ourselves this glossy new Euro-future without becoming a culturally bereft Euro-province.

Ok, its very easy to see that you are Euro-sceptic, but since I like you and your way of debating it, I would like the same decency from you that you got from me, so please answer the questions(and my posting).

Thank you.

 

[MickB]

I honestly thought I was.

 

[Australianlibertarian]

I am all for the E.U economic zone, as it will ultimately help European economies grow due to free trade. What I absolutely despise is the need for more government. There is actual need for a European Parliment, which essentially places more taxes on the citizen. If you look what the Americans, Canadians, and Mexicans did you can see a very good example of how free trade agreements can be reached without the subsequent need for a North American Parliment.

Free trade in Europe terrific. European Parliment: Government is not the answer.

 

[MickB]

That's been the point of every British 'Eurosceptic' - were were, after all, sold Europe on the premise that it would indeed be a Common Market of trading nations.

The British are of course quite big about being independent and at liberty to act in free will - probably because we fought hard to keep it and restore it for other Europen nations , plus we're set in our own moat.

 

[bub]

You can not compare the UE with the ALENA or the USA.

27 Nation-states freely transferring parts of their sovereignity is unique in the world.

Getting united (confederation or federation) is the only way for Europe to be a super-power. First of all it brings peace and stability, economic growth, it gives us much more political power abroad, it helps the less wealthy countries such as Poland (just look at how Irland has changed in 25 years)...and also a substitue to $!

I'm happy our economy is healthy.