Europe

A Postcard from Denmark : Nordic Countries: Leading lights to the rest of Europe ^New

The Nordic countries had earned the moniker of “welfare states”, thanks to the liberal social spending undertaken by their governments over the past decades. However, from the tax- and-spend days of the 1970s and 1980s, the Nordic economies have systematically reduced government spending over the years with Sweden taking the lead. Though the corporate tax rate has been reduced to 22% and the government’s share of GDP has been brought down over the years, the Nordic countries have devised a unique system where public and private sectors work in tandem to provide the best of services to the general public.

Emerging Europe Review ^New

In its January forecast, the European Bank for Reconstruction and Development sounded optimistic over the economic prospects of most of the countries covered in this review, which also include Turkey. The bank said on the whole, the central and eastern European region would register a slightly higher growth this year than what was recorded in 2012, based on the premise that the Euro-zone crisis is unlikely to deteriorate further. Regarding the major economies in the region, the EBRD sees Russia maintaining the same rate of growth, while the emerging economy of Turkey, which comes under the purview of the bank due to its close ties with Europe, is forecast to pick up speed after last year’s slowdown.

Developed Europe Review ^New

After withdrawing into the background in late 2012, the Euro-zone sovereign debt crisis resurfaced in the first quarter with the Italian elections and Cyprus’ banking crisis. Among economic developments, the Euro-zone remained in a recession, with the currency bloc’s GDP declining more than expected in the first quarter. To boost growth, the European Central Bank recently cut its main interest rate to a record low but the first-quarter GDP contraction strengthened the case for another rate cut soon.

Country Profiles:

Sweden ^New

Sweden’s export-dependent economy was badly shaken by the financial crisis. However, the largest economy in the Scandinavian region staged a comeback in 2010, helped by strong public spending and a pick-up in external demand.

Financial Services Center in Dublin on the banks of the River Liffy

Ireland ^New

Ireland is slowly picking up the pieces after the €85-billion bailout from the IMF and the European Union last year. The country hopes to turn a new page under the stewardship of its newly elected prime minister.

Poland ^Updated

After posting a modest growth even during the global financial crisis, Poland seems to be on the right track to achieve greater heights. A stable administration and its strong trading partner Germany are the drivers of its economic progress.

Turkey ^Updated

The re-election of Recep Tayyip Erdogan as prime minister bodes well for Turkey. However, an overheating economy and the lack of absolute majority in Parliament are the fresh challenges he has to address in his third term in office.

Germany ^Updated

On the back of a quicker-than-expected revival in world trade and inventory restocking across the globe, Germany managed to emerge from recession in the second quarter of 2009 after experiencing four quarters of contraction. Since then, Germany has recovered commendably, clocking 3.6% GDP growth in 2010 — the best since its reunification.

Italy ^Updated

The Euro-zone’s third largest economy emerged from its worst recession in over six decades in the third quarter of 2009. Italy experienced five consecutive quarters of contraction, witnessing a massive 4.8% decline for the year 2009 as a whole.

Les Invalides: The burial site of Napoleon

France ^Updated

One of the first countries in the Euro-zone to exit the recession, the French economy bounced back to growth in the second quarter of 2009. A recovery in exports as well as strong domestic consumption powered this resurgence after four consecutive quarters of contraction.

United Kingdom ^Updated

After remaining in the firm grip of recession for six consecutive quarters, the worst in the last 70 years, the U.K finally reverted to growth in the last quarter of 2009 at a higher than expected quarterly growth rate of 0.4%.

The Alhambra is a representation of Moorish culture

Spain ^Updated

Contracting by about 3.6% in 2009, the Spanish economy has been one of the hardest hit by the global financial crisis. While it narrowly managed to scrape out of the recession in the first quarter of 2010, recording a marginal growth of 0.1%, the economy is expected to remain on a weak footing for quite some time.

Russia ^Updated

Though Russia’s GDP growth rate trails the other BRIC economies, the second half of 2010 brought some cheer. The Russian government, realizing the need to improve investor perceptions about doing business in the country, announced a $32-billion privatization of state-run assets beginning in 2011.