Britannia Radio

Here is the effect of the recession on trading in the eurozone.  Note 
that "exports" include sales to non-euro EU members such as Sweden 
and the UK as well as most of eastern Europe.

The increased deficit is due to increased IMPORTS!

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BBC ONLINE   17.11.08
Eurozone swings to trade deficit

The eurozone's trade gap could widen further.

The eurozone swung to a trade deficit in September from a surplus a 
year earlier, according to initial estimates from the EU's statistics 
office.

The trade deficit with the rest of the world was 5.6bn euros (£4.75bn;
$7.1bn) for the month, compared with a surplus of 2.9bn euros in 
September last year.

The trade gap narrowed from August, when the deficit stood at 9.4bn 
euros.

The year-on-year deterioration in the euro zone's trade balance was 
caused by a sharp rise in imports.

The deficit for the nine months to the end of September was 29.6bn 
euros. At the same time last year, the eurozone trade balance showed 
a surplus of 13.2bn euros.

With exports unable to keep pace with imports, the trade gap could 
widen further.
"We are afraid that we will see, going forward, some deterioration in 
the trade balance with flagging exports," said Holger Schmieding at 
the Bank of America.
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INTERNATIONAL HERALD TRIBUNE 17.11.08
EU logs a trade deficit after surplus

Reuters BRUSSElS:
  A sharp increase in imports pushed the euro zone into  a trade 
deficit in September compared with a surplus a year earlier, data 
showed Monday, while severe economic slowdowns for its main trading 
partners bode ill for European exports in the coming months.

The European Union's statistics office said the external trade 
deficit of the 15 countries using the euro totaled ?5.6 billion, or 
$7.1 billion, compared with a deficit of ?9.4 billion in August and 
down from a ?2.9 billion surplus in September 2007.

Economists polled by Reuters had expected a ?7.3 billion deficit.

The euro zone swung to a deficit because imports jumped 16 percent 
from a year earlier, which economists attributed to a delayed effect 
from the record-high oil prices seen in July. Exports rose only 9 
percent.

With the economies of Britain and the United States - the euro zone's 
top two trading partners - slowing sharply, European exports are 
likely to face more pressure, economists said, despite the recent 
decline of the euro against the dollar and the pound, which makes 
euro-zone exports more affordable.

"Sharply weaker global economic activity seems highly likely to 
increasingly outweigh the beneficial impact of the euro retreating 
further," said Howard Archer, an economist at Global Insight.

"Particularly worrying for euro-zone exporters is markedly 
contracting domestic demand in the U.K. and U.S., together with 
substantially slowing activity in emerging Europe," he added.

The monthly trade data does not fully reflect the effects of the 
global financial crisis, which deepened significantly after the 
collapse of Lehman Brothers, the U.S. investment bank, in mid-September.

When adjusted for seasonal factors, the September deficit remained 
unchanged from August at ?5.7 billion, with imports and exports 
growing at roughly the same pace compared with the previous month.

This resilience in exports "was clearly helped by the euro falling 
back sharply from a peak of $1.604 in early-July to average $1.44 in 
September," Archer said.

Detailed data for September was not yet available, but a breakdown 
for the January-August period showed a sharp increase of the deficit 
in energy trade, despite falling oil prices, to ?211.1 billion from 
?146.4 billion a year earlier.

Crude oil prices fell significantly in August from a peak of more 
than $147 a barrel in July, but were still much higher than the $60 
to $70 range seen in the first half of 2007.

The increase in the energy deficit was partially offset by a higher 
surplus from exports of manufactured goods, which increased to ?197 
billion in the first eight months of 2008 from ?165.3 billion a year 
earlier as the euro weakened against the dollar.

While the trade gap with China stayed unchanged at ?71 billion for 
the January-August period, the deficit with Russia, which sells large 
amounts of oil and natural gas to Europe, rose to ?28.4 billion from 
?20.6 billion a year earlier.