Last year saw the trading bloc post a huge deficit whereas this year it managed a €10.2 billion surplus in October. Foreign sales shot up by 14% helped by free trade agreements with nations outside of Europe.
Even the struggling debt ridden nations of Portugal, Greece and Spain saw some slight improvement having cut their trade deficits by a considerable margin from the months of January to September. Italy also managed to get a slight surplus. Trade with the United States, Asia and Latin America is by far the best way for Europe to drag itself out of its problems.
Another good piece of news for the region is that wages in the Mediterranean saw only modest increases, aiding competitiveness after a decade of unrealistically high ones paid during the boom years. Overall, euro zone hourly labour costs rose 2 %in the quarter, mainly because of a 3.3 percent increase in Germany, which also bodes well because wealthier consumers in Europe’s largest economy could buy more of their neighbours’ products.
The rise in overall labour costs in the 17-nation bloc was nearly half the level of increases in early 2009, at a time when Europeans were giving themselves generous pay hikes, pushing up the cost of labour by 12 percent between 2001 and 2011.
With signs of things beginning to turn in the Euro-zone the long road to recovery is hopefully underway, unless of course the USA falls over the ‘fiscal cliff’….
The Pound to Euro exchange rate is currently trading at 1.2288
The Pound to US Dollar exchange rate is currently trading at 1.6205
The Pound to Australian Dollar exchange rate is currently trading at 1.5395
The Euro to US Dollar exchange rate is currently trading at 1.3185
The Euro to Pound exchange rate is currently trading at 0.8135
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