Weekly Standard
November 12, 2011
Greece is a far away country about which we know very little, as Neville Chamberlain described Czechoslovakia right before developments there brought the world closer to World War II. France has not been a great friend in recent times of America—remember Freedom Fries?—so its travails aren’t causing Americans to lose any sleep. Germany seems to the casual observer to be in good shape, so no worries there. Italy, of course, is of concern, and not only to some 18 million Americans who claim Italian ancestry, but with the resignation of Prime Minister Silvio Berlusconi surely his successors will find a solution to a country running a smaller deficit relative to its size than is America. So no need to worry about the failure of eurozone politicians to come up with a solution to its problems.
And yet, we Americans are spending more time on Europe’s problems than on our own, if the press and television coverage is any guide. Of course, this might be due to political overload—repeated debates among Republicans seeking the opportunity to take on what they see as a wounded Barack Obama, daily television appearances by the president, charge and counter-charge about everything from who is responsible for the deficit to the private life of Herman Cain. More likely, however, attention to eurozone problems stems from concerns about their possible impact on the American economy.
For one thing, exports to Europe, although small, are not of zero significance. Sales to the EU account for about $240 billion, less than 3 percent of GDP and 19 percent of total exports. Eurozone countries account for about $180 billion of the EU total. Not a lot in the $15 trillion American economy, but not to be sneezed at in a period when the economy is struggling to record a bit of growth, especially when emerging markets for American goods also seem to be entering troubled times. And as always, the aggregate figures conceal important facts: GM profits were hit hard by eurozone weakness.
More
No comments:
Post a Comment