Spain to fail

 After a period of active growth between 2013 and 2019, Spain experienced the worst single-year economic fall.  Together with France and Italy, Spain has been losing positions in the club of the biggest economies after the introduction the Economic and Monetary Union. In this blog, I recommended France, Italy, and Spain to leave the EU as Germany squeezes them as a piton.  The 2020 COVID-19 pandemic for Spain was much worse even than for France and Italy. Figure 1 demonstrates that the real GDP per capita has been growing at a relatively good pace before the Great Recession. Between 2008 and 2013, Spain fell back to the 2001 level. In 2019, real GDP per capita in Spain was $38,128 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic dramatically reduced the Spanish economy. The curve in Figure 1 fell to $33,750, i.e. by $4,379 (see Figure 2).

This fall is larger than in France, Austria, but it is lower than the UK ($4,538).  In relative terms, the fall in the real GDP per capita was 13.0%, i.e. worse than in the UK with 11.6% (see Figure 3). The COVID-19 pandemic in 2021 is still far from normal with the third wave coming before the end of the second wave. The slow growth rate together accompanied by an extremely high unemployment rate (16.3%) indicates that the Spanish economy has clear long-term economic and social problems. 

Figure 1. Evolution of real GDP per capita in Spain according to the OECD database.

Figure 2. Evolution of real GDP per capita in Spain according to the OECD database. The 2020 fall is $4,379 (constant 2015 US dollars). 

Figure 3. Evolution of the growth rate in real GDP per capita in Spain according to the OECD database. In 2020, the overall fall is 13.0%, which is much larger than in 2009 – 5.0%.

 

Economically, Italy dropped into the mid-1990s

Since the introduction in the EU of a monetary union (around 1995), Italy has been suffering the worst period with several consecutive economic falls. In this blog, I recommended France and Italy to leave the EU as Germany squeezes them as a piton.   The 2020 COVID-19 pandemic for Italy also was much worse than for Germany. Figure 1 demonstrates that the real GDP per capita has been growing at a relatively good pace before 2000, and then a series of no-growth and fall episodes returned the Italian economy to 1995, i.e. to the start of the Monetary Union. Essentially, Italy lost 25 years for nothing in economic terms and this finding goes together with the incredible growth of Germany.  In 2019, real GDP per capita in Italy was $38,717 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic dramatically reduced the Italian economy. The curve in Figure 1 fell to $35,450, i.e. by $3,267 (see Figure 2).

This fall is smaller than in France, Austria, and the UK.  However, if to convert the absolute fall in the real GDP per capita into the relative fall one obtains 9.2%, i.e. almost the same as in France (9.3% fall) (see Figure 3). The COVID-19 situation in 2021 is not promising with the third wave coming before the end of the second wave. Therefore, the Italian economy has clear long-term economic and financial problems. Figure 3 shows that the trend in the rate of economic growth is negative since 1970, but the years after 2000 are the worst – just above or below the zero line.

Figure 1. Evolution of real GDP per capita in Italy according to the OECD database.

Figure 2. Evolution of real GDP per capita in Italy according to the OECD database. The 2020 fall is $3,267 (constant 2015 US dollars). 

Figure 3. Evolution of the growth rate in real GDP per capita in Italy according to the OECD database. In 2020, the overall fall is 9.2%, which is much larger than in 2009 – 6.2%. The trend in the rate of economic growth is negative since 1970, but the years after 2000 are the worst – just above or below the zero line.

 

German real GDP per capita fell by 5.2% in 2020. Not bad relative to France and the UK

In relative terms, Germany is one of a few gainers in the EU. The real GDP fall was much smaller than in France and Austria.  Figure 1 demonstrates that the real GDP per capita has been growing at a healthy pace since 1970 - $593 per year.  In 2019, it reached $49,991 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic affected the German economy and the curve in Figure 1 fell to $47,506, i.e. by $2,485 (see Figure 2). (In Austria, the absolute fall in the real GDP per capita in 2020 was $3,705, in France $3,605, in the UK - $4.584.) The same level was observed in 2015.  In 2020, the GDP per capita fall was just marginally larger than that observed in 2009 - $2,418. Therefore, the Great depression has the same impact on the German economy as the COVID-19 pandemic. It might be related to the industrial orientation of the German economy and more competent reaction to the pandemic as expressed by much lower numbers of COVID-19 cases and fatalities. The stability of the German industry is based on the availability of materials and energy. This makes the Nord Stream 2 a vital asset for further economic progress. There are different views on the German future. For example, Greens are aimed at the conversion of the German economy into a post-modern country living on donations.  The highest technical skills will degrade and the economic power of Germany will decrease. The beneficiaries of this process are obvious. It will be similar to the degrading economic status of France in the EU after the Monetary Union was introduced but on the global scale.

 

If to convert the absolute fall in the real GDP per capita into the relative fall one obtains 5.2%  with 5.7% in 2009 (see Figure 3), i.e. much lower than 7.55% observed in Austria, 9.3% France, and 11.6% in UK. The COVID-19 the situation in 2021 is still difficult with vaccination problems, lockdown measures, and extensive anti-covid protests. The German economy has good long-term perspectives of real growth.

Figure 1. Evolution of real GDP per capita in Germany according to the OECD database.

Figure 2. Evolution of real GDP per capita in Germany according to the OECD database. The 2020 fall is $2,485 (constant 2015 US dollars). 

Figure 3. Evolution of the growth rate in real GDP per capita in Germany according to the OECD database. The 2020 fall is 5.2% with 5.7% in 2009.

 

Double-digit fall in the British economy in 2020

The UK demonstrated extreme economic failure in 2020. Figure 1 shows that the real GDP per capita in the UK has been growing at a healthy pace since 2009.  In 2019, it topped at $44,080 (constant 2015 US dollars) as reported in the OECD database. In 2020, the extremely inefficient response to the COVID-19 pandemic almost killed the British economy and the curve in Figure 1 fell to $39,496, i.e. by $4,584 (see Figure 2).

If to convert the absolute fall in the real GDP per capita into the relative fall one obtains 11.6% (see Figure 3), i.e. much larger than 7.55% observed in Austria and 9.3% in France. The COVID-19 situation in 2021 gives some positive signals with the accelerating rate of vaccination. The UK has a good long-term perspective if to judge by the period between 2009 and 2019.  

 

Figure 1. Evolution of real GDP per capita in the UK according to the OECD database.

Figure 2. Evolution of real GDP per capita in the UK according to the OECD database. The 2020 fall is $4584 (constant 2015 US dollars). 

 

Figure 3. Evolution of the growth rate in real GDP per capita in the UK according to the OECD database. The 2020 fall is 11.6%.

Epic-epic fall in the French economy in 2020

In economic terms, France is one of many losers in the EU (see this post).  Figure 1 demonstrates that the real GDP per capita has been growing at a very slow pace since the mid-1990s.  In 2019, it topped at $43,062 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic ruined the French economy and the curve in Figure 1 fell to $39,457, i.e. by $3605 (see Figure 2). (In Austria, the absolute fall in 2020 was $3,705.) This fall returned the French economy in the mid-2000s.   

If to convert the absolute fall in the real GDP per capita into the relative fall one obtains 9.3%, i.e. much larger than 7.55% observed in Austria (see Figure 3). The COVID-19 situation in 2021 does not demonstrate positive signals with the accelerating increase in the number of new cases in March and the absence of an accelerating rate of vaccination. The French economy has long-term problems with real growth and one of the largest falls between the EU countries in 2020 induces a further drop in the economic influence of France within and outside the EU. France will soon fall to the third basket of economic powers closer to Poland. 

Figure 1. Evolution of real GDP per capita in France according to the OECD database.

Figure 2. Evolution of real GDP per capita in France according to the OECD database. The 2020 fall is $3705 (constant 2015 US dollars).

Figure 3. Evolution of the growth rate in real GDP per capita in France according to the OECD database. The 2020 fall is 9.3%. 

The 2020 epic fall in the Austrian economy might be not the end of the story

In economic terms, Austria is a relatively successful European country with a real GDP per capita level of $52,746 (constant 2015 US dollars) in 2019. In 2020, the COVID-19 pandemic heavily affected almost all economies, and Austria was not excluded. Figure 1 shows the trajectory of real GDP growth since 1970 as reported in the OECD database. In 2020, the fall of $3705 (see Figure 2) is much larger than in 2009 ($2003). We are going to compare this fall with that in other developed countries in future posts and discuss the relative success of various economies. Austria is not the worst between them, but this fall is the largest in Austria since 1970.  It is worth noting that the Austrian economy had significant difficulties not only in 2009 but also between 2012 and 2015. 

The absolute fall of $3705 in 2020 is a good measure of economic disaster since every Austrian citizen lost personal income proportional to $3705 and this loss affected public behavior as expressed by crowded demonstrations against the government measures related to COVID-19. The relative fall of 7.55% (see Figure 3) is a better measure when we compare different countries. The overall fall varies between economic segments and the service-related business suffered the most. Austria has a significant portion of GDP associated with tourism and this part of the economy does not look sustainable in the mid-term perspective. The start of 2021 revealed that Austria suffers not only individual problems but also the difficulties related to the crash in the EU cooperation in the civil domain (border closer, fight between EU members for medicine and vaccines, fight between government and society). The start of 2021 does not look promising with a dramatic increase in new COVID-19 (UK version) cases and lockdown in April. The vaccination rate is still slow and, with a half-year protection half-life, that makes the repeated cases possible. 

There is good news in the OECD data. The Austrian population grew are a 0.5% rate in 2020. The extensive population growth is important assistance to any economy. The US has been demonstrating the importance of “fresh blood” in the economy since the very beginning and the border opening is an effective alternative to MAGA. Financial markets are happy.   

Figure 1. Evolution of real GDP per capita in Austria according to the OECD database.

Figure 2. Evolution of real GDP per capita in Austria according to the OECD database. The 2020 fall is $3705 (constant 2015 US dollars).   

Figure 3. Evolution of the growth rate in real GDP per capita in Austria according to the OECD database. The 2020 fall is 7.55%. Due to population growth, the real GDP fall is 7.05%, the population growth in 2020 was 0.5%.

 

Suez

 In the conflict between "West" and Russia/China the key element is the risks associated with international trade. I mentioned in this blog that China has a strategic hold of the Malacca strait and is able to block it any time. A similar situation is observed with the Suez channel with two Russian military strongholds near both sides of the channel. The current blockage of the Suez demonstrates the outcome of a short blockage.

Mortality statistics does not provide LGBTQ+ split. Why?

 I wonder why the mortality statistics contain gender (male and female) and race split but no sexual self-identification? Does that mean that this identification is not applicable to the dead?

Army considers change to Combat Fitness Test scoring for male, female soldiers

Army considers change to Combat Fitness Test scoring for male, female soldiers: The reevaluation of the Army Combat Fitness Test comes weeks after Congress delayed its implementation over concerns the new test created an unfair disadvantage to female soldiers.

Interesting story. I wonder that in critical conditions men and women are different in physical capabilities. That's obvious statistically and genetically (height, weight, muscular strength, body proportions, etc.). Who could even imagine that women can fit men's tests and proposed to match the same requirements? Look at sport  - records are quite different and the statistics of achievements definitely show that the average levels differ significantly. 

EU bureaucracy failed in the 2020 crisis

In this blog, a thorough economic study was presented which showed that France and Italy lost their economic and financial power after the start of the Monetary Union. Several individual cases were combined in an academic paper.    Le Figaro article "«La crise du Covid ou le début de la fin de l’Union européenne?» stated a new problem - the EU failed in vaccination crisis. The UE has no responsibility for people as such. The Le'Figaro article suggests Frexit as a solution to the problem. i.e. the same solution as I proposed considering poor economic performance within the  EU monetary system

Actually, the EU bureaucracy is not responsible for anything, and its operational speed corresponds to the absence of responsibility for real life. This is a very strong argument in favor of effective management - psychopaths without empathy are always most effective in capital management. However, COVID19 is not about effectiveness. It is about human lives, the EU failed. Recently, Austrian Bundekanzler Kurz claimed that vaccine distribution in the EU was not proportional and secret agreements between the EU medicine authorities and some (not openly named) countries led to preferences in human life protection. I was very optimistic about the EU's future a year ago and now I am disappointed.