Euro Factor in the External Trade of the Eurozone Countries

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A. Polivach, Primakov Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya St., Moscow, 117997, Russian Federation (apolivach@imemo.ru)



Abstract

The author investigates the influence of the single European currency on the external trade performance of particular members of the Eurozone. It is analyzed on the basis of IMF’s statistics on real effective exchange rates of the Euro for every Eurozone’s member and their external trade dynamics in the periods before and after introduction of the Euro. The author points out that, even though with the national governments lost an ability to pursue own exchange rate policy, they still implement independent financial, economic and labor policies. The discrepancies in these policies determine the value of the Euro’s real effective exchange rate calculation for particular members. Respectively, the modern days’ external trade competitiveness of a particular member state is predicated upon the effectiveness of the above-mentioned policies and their succession with the pre-Euro era policies. The author concludes that widespread idea that Germany is the only beneficiary from the Euro’s introduction while other Eurozone members are the losers is ill-based. Also, while researching statistical data for this article it was discovered that the figures of mutual trade between the Eurozone member states are not quite compatible despite the fact that there are no trade barriers and that the customs statistics methodology has been harmonized inside the Eurozone. According to available statistics, in many cases the exports from one member state substantially exceeded respective imports of another member. According to statistical methodology the situation should look vice versa due to exports’ valuation in fob prices and imports’ – in cif ones that normally exceed them. This circumstance makes extremely difficult a persuasive statistical verification of any hypothesis about influence of the Euro on the external trade of the Eurozone members.


Keywords

Eurozone, external trade, Euro, real effective exchange rate, export, import, Germany


Text 

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For citation:
Polivach A. Euro Factor in the External Trade of the Eurozone Countries. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2015, vol. 59, No 12, pp. 72-79



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