European perspectives and meaning for the USA

The USA exports goods and services for 1,48 billion Euro to Europe (2% of GDP and 20% of US exports), and imports for 0,96 billion Euro from Europe. Mr. Joseph Quinland of US Trust made an interesting comment in Finnish business paper Kauppalehti on June 15th by stating that Europeans are in charge of around 30% of total world private consumption – that is more than Americans and much more than Chinese. About half of foreign income of US corporations is generated in Europe. He continues stating that transatlantic economy represents 41% of world’s GDP! So, there is an important role to be played by Europeans for the world economy and US especially.

The problems in Europe vary a bit by country, but the basic question is how to generate growth. The growth brings jobs, investments, and capital into a country. Especially Spain, Portugal, Italy, and Greece need more and faster growth. The growth comes however through private enterprises and some public projects for infrastructure building. We have to ask, if there is demand for products and services in those countries and made by those countries. The best business prospectives are for companies located in Northern Italy, because they make high tech and high quality products for global markets. For Greece it looks much more complicated – the base for value added manufacturing and production is much thinner than in Italy. European politicans want to keep Europe more or less united and Euro zone as one, but EU has already today several currencies like Swedish Krona, Danish Krona, Czech Koruna, Sterling Pound, Polish Zloty etc. So, from that perspective it wouldn’t be a big deal to have a couple of more currencies in the EU. The nations in trouble would benefit from a lower valued currency to boost their exports and thereby generating  growth and jobs. My personal projection leans towards this kind of thinking – more national currencies, but stronger political and economical unification of EU. At the end there will be a federal state of Europe. Local currencies would allow differences in speed of economies, progress, productivity etc.

For the US economy it makes sense to keep and develop business with Europe on a high level to boost manufacturing in the USA and repatriating earnings from Europe. This balances also nicely the development in and dependence from Asia. Europe will see more national currencies and a deeper political and economic unification.

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Explore posts in the same categories: Europe, Growth, US Economy

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