Renewed competitiveness and structural reforms are expected to be the recipe for growth and employment in the Euro Area. The target is to change the growth framework in order to generate productivity gains.
These discussions were very interesting but the question we can have now is the following: which country has done something?
A simple measure for that can be exports. Their momentum shows how an economy can change its way of producing to be able to sell more products outside.
The chart below has looked at the 4 main countries of the Euro Area. I have taken nominal exports and I have based them at 100 during the first half of 2008 (before the Lehman moment). Data start on January 2008 until July 2013.
The chart is impressive.
Spain’s exports are 23% above the level they had during the first half of 2008. They have changed their mind and have made a lot of efforts to improve their competitiveness. As their internal demand was down after the real estate crash, they needed to find an impulse from outside. That’s a point seen on the chart. More exports will lead to higher production and it can be a way to exit from the current recession. It has been costly for everyone in Spain but a pay-off can be expected.
Germany has a moderate trajectory specifically since 2012. It is consistent with a low world trade momentum.
France and Italy have a low profile on exports. This probably reflects the lack of efforts on structural reforms and on competitiveness. They will have to change their mind as both of them have poor internal demand dynamics and may look at what Spaniards have done.