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The most relevant balance of payments for the Euro-zone is, of course, the aggregated Euro-zone balance of payments. However, that is impolitic to make a big deal about, because it would be one more road-block to expanding the Euro-zone to include more of the EU membership, so I guess everybody just continues to publicly pretend that it is the national balance of payments that matter, while in private running up spreadsheets to aggregate the Eurozone nation accounts when they want to look at what is really going on.
When looking at those spreadsheets, how easy is it to distinguish external flows to/from other Eurozone states from external flows to/from third party states?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Mon Jun 2nd, 2008 at 06:28:25 AM EST
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When working with the balances ... you can just add them. A capital transaction outflow from one Eurozone nation that is an inflow to another will show up as a + in one balance and a - in the other, so when the balances are added up, it drops out.

When working at the individual accounts, you need to sum the individual accounts and then subtract the sum of the corresponding account for each bilateral flows within a group, to work out a set of balance of payments for a given bloc.

If bilateral flows of each member of the Eurozone have already been grouped to give a figure "to other Eurozone nations", that simplifies that second process substantially.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jun 2nd, 2008 at 09:20:03 AM EST
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