The Euro crisis in one table?

In the short term, the Euro crisis is about the ability to roll over debt.  As with a commercial business, it’s the cashflow that kills you.

In the long term, a lot of commentators think the root cause is long-term flows of capital from the southern European countries to the northern ones.  I can’t comment on whether that view is correct, but this table makes it really obvious why people hold that view.

The table describes the balance of payments current account – essentially the amount of money permanently moving out of, or into, a country.  For example because that country is producing stuff people want, or because overseas workers are sending money home.

Every Eurozone country on that list with a persistent negative balance is in crisis.  Most with a persistent positive balance aren’t really.

Of course, it’s hard to know what the cause and effect is here – for all I know, this could be merely a symptom of a deeper problem that the bond markets are also picking up on.  Answers on a postcard.

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