The total budget deficit of the 27 EU member states swelled to -23,4 billion euro in Q1 2010, from -9,2 billion in Q4 2009, the first estimate from Eurostat show. At the same time, the trade surplus fell to EUR 13,2 billion, down from 19,1 billion in the previous quarter. The 750 billion bailout affect will probably surface in the Q2 numbers.
“These provisional data, issued by Eurostat, the statistical office of the European Union, will be subject to revision.”
The EU27 external current account recorded a deficit of 23.4 billion euro in the first quarter of 2010, compared with a deficit of 50.6 billion in the first quarter of 2009 and a deficit of 9.2 billion in the fourth quarter of 2009. Looks suspiciously like a double-dip, to me…
And I’m really curious about how the 750 billion bailout package will effect the Q2 numbers.
Eurostat also reports that the EU27 external balance of trade in services recorded a surplus of 13.2 billion euro in Q1, compared with a surplus of 19.1 billion in the fourth quarter of 2009, and a surplus of 13.3 billion in Q1 2009.
In the next quarter we’ll also see the effect of the recent decline in euro’s exchange rate.
It can be pretty ugly.
Eurostat points out that these provisional data, issued by Eurostat, the statistical office of the European Union, will be subject to revision.
The EU27 includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.
Rotten To The Core?
EU’s “hard core” countries – called EA16 – consisting of Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland is responsible for 19,6 of the total 23,4 billion euro deficit, the estimates show.
That’s an increase of 26,6 billion euro, compared to Q4 2009.
In these countries the trade surplus have been cut in half during the first three months of 2010.
The “current account” shows flows of goods, services, income and current transfers between resident and non-resident entities. More specifically, the four main components of the current account are defined as follows:
1. The “goods account” covers general merchandise, goods for processing, repairs on goods, goods procured in ports by carriers and non-monetary gold. Exports and imports of goods are recorded on a f.o.b./f.o.b. basis, i.e. at market value at the customs frontiers of exporting economies, including charges for insurance and transport services up to the frontier of the exporting country.
2. The “services account” consists of the following items: transportation services performed by EU residents for non-EU residents, or vice versa, involving the carriage of passengers, the movement of goods, rentals of carriers with crew and related supporting and auxiliary services, travel, which includes primarily the goods and services EU travellers acquire from non-EU residents, or vice versa, and other services, which comprise those service transactions such as communication services, insurance, financial services etc.
3. The “income account” covers two types of transactions: compensation of employees paid to non-resident workers or received from non-resident employers, and investment income accrued on external financial assets and liabilities.
4. The “current transfers account” includes general government current transfers, e.g. transfers related to international co-operation between governments, payments of current taxes on income and wealth, etc., and other current transfers, e.g. workers’ remittances, insurance premiums – less service charges – and claims on non-life insurance companies.
ECB Accounting Responsibility
In line with the agreed allocation of responsibility, the European Central Bank (ECB) is in charge of compiling and disseminating monthly and quarterly balance of payments statistics for the euro area, whereas the European Commission (Eurostat) focuses on quarterly and annual aggregates of the EU.
“The data comply with international standards, in particular those set out in the IMF Manual on Balance of Payments Statistics (5th edition). The aggregates for the euro area and the EU are compiled consistently on the basis of Member States‘ transactions with residents of countries outside the euro area and the European Union respectively,” Eurostat writes in a statement.
Adding: “Monthly data may not add up to quarterly data due to rounding.”
“The EU balance of payments euro-indicators (first estimates for the reference quarter) are based on figures (current account and trade in services balances) provided by the Member States to Eurostat two months after the reference quarter, and should be considered as provisional. This News Release corresponds to these first estimates. Eurostat then produces a second release once the quarterly data are transmitted to Eurostat, on a more detailed basis, three months after the reference quarter. Figures may also be subject to revision when data for later quarters are transmitted by the Member States,” Eurostat states.
The second release for the first quarter of 2010 will be issued on 22 July 2010.
Disclosure: no positions