New EU Reports: Current Account Surpluses; Fiscal Sustainability Post author By Philip Lane Post date December 19, 2012 here and here. Categories In Uncategorized 1 Comment on New EU Reports: Current Account Surpluses; Fiscal Sustainability ← FT Editorial: Let Ireland Succeed → Ireland: Eighth Review Under the Extended Arrangement; Staff Report; Staff Supplements; and Press Release on the Executive Board discussion One reply on “New EU Reports: Current Account Surpluses; Fiscal Sustainability” For example, “Germany’s merchandise trade surplus vis-à-vis the rest of the euro area increased significantly in the years preceding the crisis, but it has almost halved since 2007. The surplus vis-à-vis the rest of the EU, which had increased very rapidly following the 2004 enlargement, has also decreased in the last few years. In contrast, the surplus vis-à-vis the rest of the world had developed more moderately before the crisis, but has increased significantly since 2007 and represented around one-third of the German surplus in 2011. The UK for example is increasing its trade deficit with Germany It appears to want to hook into the Rhine /Rhur region at the expense of the PIigs. it has chosen real goods over income (see UKs current account second quarter) This is a very big event. meanwhile countries such as Spain is cut off from this capital flow and yet is unable to produce domestic currency to utilize its existing accumulated capital base to the greatest extent posssible…. Example people continue to use Euro capital tokens rather the Spanish money tokens. Its as cheap to drive a car as get on a train. Real capital (hard currency) is exported out of the country as the Euro or dollar oil balance does not move. Instead the capital base both human and mechanical must be crushed. Comments are closed.