EU posts current account dificit of $55.7 billion

[News_Editor]

EU posts current account deficit of $55.7 billion

2011-07-23 01:50:44 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- The European Union (EU) on Friday announced that its current account within its 27-nation region recorded a deficit of 38.8 billion euros ($55.74 billion) in the first quarter of the year, compared with 2010's first quarter deficit of 27.7 billion euros ($39.79 billion).

This year's first quarter posted an increase in the deficit of the goods account (-46.5 billion euro compared with -32.6 billion) and of the current transfers account (-19.2 billion compared with -16.6 billion). The surplus of the services account rose (+16.9 billion compared with +11.5 billion), while the surplus of the income account remained stable (+9.9 billion compared with +10.0 billion).

According to the EU's statistical office, Eurostat, the surplus recorded in the services account (+16.9 billion euro) is mainly the result of surpluses in "other business services," which includes miscellaneous business, professional and technical services (+7.1 billion), financial services (+6.7 billion), computer & information services (+5.8 billion), transportation (+3.1 billion), insurance services (+2.5 billion) and construction services (+1.8 billion), partially offset by deficits in travel (-3.2 billion) and royalties & license fees (-2.4 billion).

Furthermore, the EU external current account in the first quarter of the year recorded a surplus with the USA (+14.0 billion), Switzerland (+11.6 b billion euro), Hong Kong (+5.5 billion), Brazil (+3.6 billion), Canada (+2.7 billion) and India (+1.0 billion), and a deficit with China (-32.9 billion), Russia (-18.9 billion) and Japan (-8.1 billion).

In addition, the EU made direct investments abroad of 71.2 billion euros ($102.3 billion), compared with 38.7 billion in the same quarter of 2010, while foreign direct investors made investments in the EU of 63.5 billion, compared with 10.8 billion in the same quarter of 2010. Portfolio investments, meanwhile, recorded a net inflow of 67.5 billion, compared with 93.9 billion in the first quarter of 2010.

-- © BNO News All rights reserved 2011-07-23

[maidu]

I would have thought the Europeans would be somewhat responsible in regard to overspending and borrowing. I'm unpleasantly surprised that the good folks of the EU are doing what Americans and many others have been doing for decades, both within their households, and on a government level: Spending waaaaaay beyond their means. It's like the head of a family paying for everything, including day trading, with credit cards, while his income is fixed or lessening.

Just one example (out of millions) of crazy spending on the other side of the Atlantic: Big automakers, like GM, take out loans each time they're obligated to pay their payrolls. It's just a bad habit that's become ingrained. You'd think they'd pay payroll from their revenues (cash on hand), but no, they take out loans each time - and accrue the % as well.

[rodentwarrior]

"I would have thought the Europeans would be somewhat responsible in regard to overspending and borrowing. I'm unpleasantly surprised that the good folks of the EU are doing what Americans and many others have been doing for decades, both within their households, and on a government level: Spending waaaaaay beyond their means. It's like the head of a family paying for everything, including day trading, with credit cards, while his income is fixed or lessening."

Oh dear, you don't know much about the financial mismanagement that goes on in the European Union. They are a bunch of gravy train riders who have no clue about budget balancing. Most EU governments are coalition socialists (pseudo communists) whose only interest is re-election so they can keep their noses at the trough.

I am surprised you thought otherwise. Despite the fact that we have a much longer history than the USA, we have more than our share of dimwits.

[cdnvic]

Take Germany out of the equation and the real numbers would be much scarier.