“All the Eurozone Is Capable of Is ‘Stealing’ Growth from Others”

There were other signs of traction. The Eurozone trade surplus with the rest of the world has been setting new records, powered by strong exports, particularly from Germany. This trend kicked off before the euro started tanking a year ago.So on Monday, ECB President Mario Draghi took the opportunity to slap himself and his colleagues on the back for their heroic and bold action, as these things are called, and offered an upbeat assessment of the Eurozone economy. He proclaimed “that growth is gaining momentum.” And he totally nailed it with three out of the four reasons he gave for that growth:

This is due to in particular the fall in oil prices, the gradual firming of external demand, easy financing conditions driven by our accommodative monetary policy, and the depreciation of the euro.

But just when we’re about to begin jubilating that the Eurozone is finally crawling out of its economic quagmire to bask in the German sun, if any, we get some very unwelcome clarity from investment bank Natixis, a subsidiary of Groupe BPCE, France’s second largest megabank:

But the important point is that this improvement in the Eurozone’s economic situation has been “stolen” from the rest of the world and does not stem from developments inside the Eurozone.

What a party-pooper report! It’s titled, “All the euro zone is capable of doing is “stealing” its growth from others.”

It then proceeds to list the three ways in which the Eurozone was “stealing” growth from other economies, which turn out to be the three very reasons that Draghi had totally nailed, and for which he was slapping himself on the back.

The depreciation of the euro. It has boosted already strong Eurozone exports, and inflated the Eurozone trade surplus further, “but at the expense of the Eurozone’s competitors,” including the US, emerging countries, and others.

The plunge in the price of oil. It has “sharply reduced the cost of the Eurozone’s energy imports,” which have been dropping from over 5% of nominal GDP in 2012 toward 3% now. But this comes “obviously at the expense of oil-exporting countries (OPEC countries, Russia).”

The trade surplus with the rest of the world, particularly Germany’s trade surplus with the rest of the world.

Full article: “All the Eurozone Is Capable of Is ‘Stealing’ Growth from Others” (Zero Hedge)

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