Data show EU Economy in a stubbornly subdued state

European Commission President José Manuel Barroso, presenting the "Europe is on its way to meeting its 2020 targets" report. The stubbornly subdued state of the EU economy though is in direct contrast with the optimism of the outgoing President. (EC Audiovisual Services, 21/03/2014).

European Commission President José Manuel Barroso, presenting the “Europe is on its way to meeting its 2020 targets” report. The stubbornly subdued state of the EU economy though is in direct contrast with the optimism of the outgoing EC President. (EC Audiovisual Services, 21/03/2014).

At the end of the first quarter of the year (end March 2014) the Eurozone economy doesn’t show any signs of change from its subdued state of the last twelve months. The bearish and widely diverging resumption of activities still prevails, after the four-year recession period which theoretically ended at the second quarter of 2013, when a marginal increase of 0.3% in GDP was recorded. Yesterday, the European Commission released its estimate for the March 2014 Business Climate Indicator (BCI) for the euro area which remained broadly unchanged (at +0.39).

Structural dualism

On top of that, the structural dualism between the EU member state economies seems to continuously take increasing dimensions. According to a Eurostat Press release issued last Thursday, income differences between member states based on hourly labour cost (wages and salaries) have increased greatly. Between 2008 and 2013 “Within the euro area, the largest increases (of hourly labour costs) were recorded in Austria (+18.9%), Slovakia (+17.0%) and Finland (+15.9%). Decreases were observed in Greece (-18.6%) and Portugal (-5.1%)”.

The same source reveals that there exist appalling differences between member states in hourly labour costs. This statistic refers to wages and salaries in the business sector excluding agriculture and the public sector plus non-wage related costs such as employers’ social contributions. In 2013, average hourly labour costs in the whole economy (excluding agriculture and public administration) were estimated to be €23.7 in the EU28 and €28.4 in the euro area (EA17). “However, this average masks significant differences between EU Member States, with the lowest hourly labour costs recorded in Bulgaria (€3.7), Romania (€4.6), Lithuania (€6.2) and Latvia (€6.3),and the highest in Sweden (€40.1), Denmark (€38.4), Belgium (€38.0), Luxembourg (€35.7) and France (€34.3)”.

Growing inequality

Understandably, the huge gap between the €3.7 and the €40.1 that a Bulgarian and the Swedish worker cost to their employer can be attributed to productivity differences. It’s not only that though. A large part of that discrepancy must be attributed to differences in the organization of the economy, the government and the state and the huge differentiation in business practices. Unfortunately, in this respect, the European Union has not helped in reducing the income differences between member states. All along the 2008 – 2013 period the income inequality has been growing, not diminishing within the EU.

As expected, industry proves to be the most productive sector of the economy turning out the largest added value and paying the highest remuneration to workers. According to Eurostat “Within the business economy, labour costs per hour were highest in industry (€24.6) in the EU28 and €31.0 in the euro area, followed by services (€23.9) and €28 respectively) and construction (€21.0 and €24.5)”.

Stagnating business climate

Now let’s turn to the stagnating business climate in the Eurozone. According to the EU Commission during this month, the Business Climate Indicator (BCI) for the euro area remained broadly unchanged (at +0.39). The relevant Press release states that, “Managers‘ production expectations and their appraisal of past production improved, while the level of overall and export order books, as well as the stocks of finished products, were viewed more negatively”.

This statement contains a contradiction. How is it possible and the managers’ production expectations have improved, while “overall and export order books, as well as the stocks of finished products, were viewed more negatively”? If the latter is true, managers are clearly predicting a worsening of the business climate soon.

Summing up, the past performance of the European Union in the front of economic convergence between member states has turned negative during the crisis years, while its immediate prospects are clearly subdued.

 

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The EU Diplomacy in North Korea promotes peace or war?

The Chinese retail revolution is heading west

UN health agency spotlights stalled effort to close health divide across Europe, in new report

State aid: Commission approves €520 million Italian scheme to compensate the trade fairs and congress sector for damages suffered due to the coronavirus outbreak

COVID-19 vaccines: EU must respond with unity and solidarity

Financial transactions tax gets go ahead

This company lets you set your own salary

The different ways of care: Is there a general rule to follow?

EU Trade Ministers come together in a desperate attempt to save TTIP

CLIMATE CHANGE FOCUS: Tunisia coastline in need of climate cash boost

Mental health in the context of a pandemic: social distance

Why is black plastic packaging so hard to recycle?

Logo Mania: A call to action to our crisis of connection

These 5 foods are under threat from climate change

EU economic governance: More exploitation for the weaker countries

The next talent opportunity for the digital workplace? Neurodiversity

An economist explains how to go carbon neutral in our lifetime

Deaths from far-right terrorism have more than tripled in the West

The cost of dying

What Europe’s SMEs need to do for a cyber-secure future

How long will people live in the future?

Insurer CEOs Reveal Marketing Strategies that Communicate the True Value of Insurance Products & Services to the Customer

UNESCO lists wrestling, reggae and raiho-shin rituals as global treasures to be preserved

In Mozambique, it’s ‘a matter of the heart’ says Guterres, lauding the cyclone-struck nation’s ‘undeniable moral authority’

China in My Suburbs

Coronavirus: Commission launches data sharing platform for researchers

Environment and health at increasing risk from growing weight of ‘e-waste’

Health spending set to outpace GDP growth to 2030

Aviation Strategy for Europe: Commission signs landmark aviation agreements with China

The impact of mobile and rapid digital adoption on how India consumes

Coronavirus: Commission adopts new exceptional support measures for the wine sector

Europe eyes to replace US as China’s prime foreign partner

Women in leadership: closing the gender gap in medicine

UN launches plan to promote peace, inclusive growth in Africa’s Sahel

Libya on verge of civil war, threatening ‘permanent division’, top UN official warns Security Council

Global public-private collaboration tackles cybersecurity skills gap

Finland is a world leader in clean energy. Here’s what’s driving its success

Iceland’s slowdown underlines the need to fix structural issues

The new era of Matriarchy?

UN political chief calls for dialogue to ease tensions in Venezuela; Security Council divided over path to end crisis

How to create a world where healthcare is a right, not a luxury

Accelerating a more sustainable industrial revolution with digital manufacturing

EU Budget 2021 deal: supporting the recovery

Blockchain is not a magic bullet for security. Can it be trusted?

6 ways data sharing can shape a better future

Millions of Afghans have ‘voted not just for a president, but also for democracy’, UN Assembly told

Doctors are humans too: the benefits of embracing your mental status

‘No shortcuts to a healthier world’: WHO chief sets out health priorities for the decade

G7 summit: Trump Vs. G6 leaders on trade and climate change

How China Mended My Heart

How AI can accelerate the search for treatments for emerging and intractable diseases

European Union disenchanted with Turkey

These are the biggest hurdles on the path to clean energy

UN chief welcomes possibility of resumed talks between US and North Korea

Global Trade Identity can be the cornerstone of paperless trade

Sahel and Central Africa: €210 million in EU humanitarian aid

Innovative finance tools could protect cities from climate change

The DNA of the future retail CEO

EU adopts new €100 million assistance package to benefit refugees and local communities in Lebanon, Jordan, and Iraq

Strict alcohol laws which cut intake more than 40 per cent in Russia, linked to historically high life expectancy

More Stings?

Comments

  1. Est-il possible de vous piquer 2 ou 3 phrases pour un site internet personnel ?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s