Sleeping euro zone slowly awakens


Five years after the crisis started, the euro area’s GDP is not back to 2008 levels yet. What is more, it is not expected to get there until 2015. The euro zone’s weight in the world is not the same as it used to be in the old ages and the GDP’s region is very likely to lay behind the U.S. in 2013, representing two thirds of its neighbor. Furthermore, both euro area and the U.S.’ GDP altogether will be equivalent to China’s.

Europe will suffer an overwhelming increase of pensioned retirement- for instance, Spain will double number of retired people by 2050 but will have a working age population 20% lower than the current levels. The only consolation that remains is that the every average Chinese citizen aims to reach some day living conditions of average European ones. They will have to face in two or three generations the problems we are facing today. Certainly, in happiness as well as in unhappiness, we lead the way.

In spite of that, 4Q13 euro zone’s GDP points out a reasonable quarter-on quarter growth rate of 0.3% and year-on-year  of 1.2%, as four main economies improve unanimously. Good numbers for Germany, France, Spain and Italy as well as their respective confidence indicators are increasing.

The interpretation will never be complete if not considering corporate results, in a bottom to top view. The future economic value of Europe will be their companies’. GDP is the sum of added values.

Corporate results seem to confirm that the old Europe is timidly awakening. They also show that big European companies are not European yet. In big consumer and industry sector, Europe means between 25-50% of sales, after losing an importance over 10% in last five years and around 20% in last decades.

2013 results suggest a good behavior of sales in the U.S. and emerging markets,while expectations in 2014 are moderately optimistic, with low digits in growth as well as in benefits.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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