World Economic Forum special report: Contents
Charts
While European imbalances cannot compete with the trans-Pacific main plot in pure scale, they are as large (and dangerous) relative to the economies concerned: which are not small. Europe’s GDP weighed in at just under $12 trillion in 2005, just below the US’s. Dividing the countries by current account surplus or deficits produces roughly equal size “half-Europe” economies in which the surplus countries’ current accounts are 5.5% of GDP and the deficit countries’ 3.3%.
There is regional coherence: surpluses are the central-northern European part of the Eurasian savings glut: Germany, Benelux, Scandinavia, Switzerland/Austria. Deficits surround them: in Britain, Ireland, France, Mediterranean Europe and central-eastern EU “accession” countries. As with the main plot, fixed exchange rate regimes seriously aggravate imbalances in Europe. And as with the main plot, imbalances are getting worse....
