Graph of the day. Retail sales in the Eurozone, selected countries
Today, Eurostat published new data on retail sales in the Eurozone. Data for October and November were revised downwards, data for December were a shocker. Remarkably, retail sales in the ‘core’ countries of the Eurozone, like Germany and the Netherlands are declining too, in the Netherlands even at an unprecedented pace. And remember: events like those in Greece and Spain are absolutely unprecedented in Western Europe in the period between 1948 and 2008 which suggests a causal relation with the introduction of the Euro and the horrible, horrible policies of the last years which were de facto aimed at increasing interest rates in southern European countries, to ‘discipline’ them, during what already was an extreme economic crisis.This might even have been a worse policy mistake than the Fed policies in the beginning of the thirties. Read Paul de Grauwe on this.
Can these countries export themselves out of the present mess? Hmmm – the Netherlands already have a surplus on the current account of around 10% of GDP, almost twice the size of the German surplus. Imagine what would have happened if French retail sales instead of going up with 7% since 2008 had gone down with 5%, like German retail sales… The Netherlands try to combat the crisis with lower pensions, zero nominal wages increases (average hourly wages paid, not negotiated wages) and higher VAT rates… I expect Dutch retail sales to go down with another 4 to 5%, this year. Caveat: retail sales are not the same as ‘household consumption’ as housing, water, electricity and the like are excluded. The data do not include sales of auto’s – but these are if anything even more dismal.