Report
Has the euro zone made good use of its excess savings?
First, it is regrettable that the euro zone has excess savings (an external surplus): it means that a portion of the euro zone’s savings is invested in the rest of the world and not in the euro zone, which reduces the zone’s long-term growth. But a second issue is how these excess savings are used: are they being used by the euro zone to accumulate profitable, productive assets in the rest of the world, which would be good for both the euro zone (its external assets would yield high returns) and the rest of the world ( where efficient investments would be financed). An observation of the nature of the capital flows between the euro zone and the rest of the world shows that the counterpart of the euro zone’s external surplus is bond purchases in the rest of the world by euro-zone residents. This is not very efficient, neither from the viewpoint of the euro zone nor from that of the rest of the world.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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