Trade as a percentage of the GDP and unemployment rates selected European countries, and debt to GDP ratios.

X                     Country                          M                         U                  D/GDP(2009)

45%               Germany                     36%                     5.9 %                 47.2%

27                   France                          25                       9.9                     83.5

24                    Italy                             24                       8.3                     119

28                    UK                                30                      8.1                     73.2

23                    Spain                            26                      22.6                   46.3

28                   Portugal                      35                        12.5                   83.9

91                    Ireland                         75                        14.2                  70.9

18.8                 Greece                         29.6                    17.6                   139.9

X exports as a percentage of the GDP; M imports as a percentage of the GDP; U rate of unemployment.   Source:The World Bank and Eurostat. Unemployment rates are for Sept.,2011, trade data for 2010; D/GDP world bank data for central govt.gross debt as of end of 2009.

Further to the argument I was making in my last post about the role of trade in a currency union and its possible impact on sovereign debt questions here is some further useful data. Of the five countries now the subject of pressure Greece, Portugal, Spain, Ireland and now Italy, only Greece and Portugal have serious imbalances where their imports strongly exceed their exports.

Italy had perfectly balanced trade in 2009 in fact a small surplus,(although in 2010 it ran a small 3.35 negative trade balance) relatively lower unemployment, although still too elevated. It clearly does not belong in a camp of beleagured countries. In terms of its net debt  to GDP ratio while it is elevated it is much less than that of  Greece or Japan. Furthermore, Italy has been running a primary surplus on its budget. It is only because of the actions of ill informed speculators and those trying to advance a neo-conservative agenda of privatization, imposed austerity, and reductions in pensions and other social benefits, as well as the failure of the European central bank to do its job in terms of helping to burn speculators and buy a fair share of Italy’s debt, that it is coming under pressure. Note that unemployment is way too high, in fact at depression levels in Portugal, Spain and Greece. On the other hand the northern countries are much better off, although unemployment is far too high in the U.K. and France. Both of these countries have close to balanced trade although France is running a small surplus and Britain a small deficit. Germany, on the other hand , has relatively low unemployment and a  a very large trade surplus.