Report
Patrick Artus

What happens when the euro zone’s external surplus disappears?

The euro zone’s external surplus is now disappearing due to the rise in the prices of products imported by the zone, in particular energy and other commodities, due both to the rise in the dollar prices of these products and the depreciation of the euro. What are the consequences of this disappearance? The euro zone is becoming poorer, because instead of accumulating external assets, it is paying income to countries exporting oil, gas and other commodities ; Structurally, in the long term, the euro will depreciate as the accumulation of external assets comes to an end; The effect on the global economic and financial equilibrium depends on how oil-, gas- and commodity-exporting countries use this additional income (purchases of bonds in dollars, or additional investments, or additional consumption, etc.) compared to the euro zone's use of its surpluses (especially purchases of foreign currency bonds).
Provider
Natixis
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.

 

Analysts
Patrick Artus

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