Sunday, August 19, 2012
UBS Reveals Who Really Won The Euro — And Why This Is Creating A Huge Political Problem
August 19, 2012
The hot read in Euro-economics this week was a note from UBS' Paul Donovan titled Who wins with the Euro? (Both ZeroHedge and FT Alpha have written about it)
The question is controversial, because there's some insinuation that whoever "won" the euro should now be in a position to make concessions helping those who lost.
Usually the argument goes: Germany has been the big winner from the euro, and now it's time to pay back the periphery.
And there's a good argument to be made on that front, especially if you look at historical trade data, and see that the German export monster pretty much clobbered everyone else in the bloc, causing them to run big deficits, while Germany boomed via vendor financing.
But Donovan's note looks instead at which countries saw the highest real disposable income gains from the time the Euro was established through 2010.
What this chart shows is Real Disposable (after-tax) Household Income Growth in each country by income decile.