/View.info/ How political and monetary cretinism creates problems where they could be avoided.
The trade balance of the EU countries has become a record negative for the entire history of the existence of the EU countries – 28.5 billion euros in a month, which has never been before. Monthly statistics are from 1999, but quarterly trade balances from 1975 confirm a staggering trade deficit.
A record surplus was recorded in January 2021 amid low commodity prices. The degradation started in March 2021, accelerated sharply from August 2021. In September 2021, the trade balance of EU countries turned negative for the first time since February 2012.
Things got very bad in December 2021, when the deficit stood at 20 billion euros per month (a deficit of 37.0 billion for the fourth quarter of 2021). But the worst is yet to come, for the first quarter of 2022, €65.4 billion was in deficit.
The reason is the record acceleration of imports, with more than 4/5 in the structure of import growth concentrated in raw materials, mainly gas and then oil and metals. Europe previously formed 80% of net purchases of US securities, the resource being a trade surplus.
The trade balance of the leading EU countries with the world. Deterioration on all fronts, with the worst placement in France and Poland, where the trade balance has become record negative.
Germany cut its surplus almost 5 times, Italy enters a sustainable deficit from January 2022 for the first time in 10 years. Marked deterioration in Spain, surplus shrinks in Netherlands to 15-year low.
EU countries are net importers of raw materials (oil, gas, coal, industrial, non-ferrous and precious metals, fertilizers, agricultural raw materials). The record acceleration in commodity prices predictably caused the trade surplus to collapse into a record deficit.
The dynamics of the increase in the prices of raw materials is synchronized with the contraction of the trade balance of the EU countries. Hell broke loose in the first quarter, but things are about to get worse in the second quarter.
Firstly, average commodity prices in Q2 2022 are higher than Q1 2022, and secondly, the situation is worsened by the fall of the euro and EU national currencies, which makes purchases even more expensive for EU countries – by around 15%. There is very little left and soon everything will break through.
Translation: SM
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