“Europe is divided”

Today’s New York Times has a fantastic article about the economic divide between the North and South of Europe and how being bound by a common currency is making getting out of the recession almost impossible for the southern economies.

The basic premise of the article is that grouping the northern economies such as Germany and France together with the southern economies of Portugal and Spain is hurting the countries in the South, because having the same currency also brought the same high wages and employment protections, but without the international competitiveness.

This is especially true for those businesses trying to compete with products made in Eastern Europe, Turkey, and China — which are all able to produce plastics, fabrics and other items southern economies used to be major exporters of, for a much lower price.

The online article also adds a graphic about a measure of competitiveness comprised by the World Economic Forum. Not surprisingly, Greece, Portugal, Ireland, and Spain are always at the very bottom of the different measures of competitiveness, while countries such as Germany, Sweden, France, and the Netherlands are generally at the top.