Sober look at trade convergence at last

SUNDAY, SEPTEMBER 23, 2012

Eurozone crisis has eliminated the periphery trade deficit

The Eurozone recession is having a somewhat unexpected effect on the periphery nations' current accounts. As was the case with Portugal (see this discussion), the Eurozone periphery has eliminated its trade deficit.

Source: CS

Domestic demand in these nations has collapsed, dramatically shrinking imports and improving the external balance. These nations just can't afford many of the goods they used to import. And as the periphery eliminated its trade deficit, the Eurozone as a whole went into a trade surplus.

See more in Sober Look http://soberlook.com/2012/09/the-eurozone-crisis-has-eliminated.html

Is this the end of trae and CAB divergence in the Eurozone?