Trade Policy of Eastern European countries
The Czech Republic
Of the emerging democracies in central and eastern Europe, the Czech Republic has one of the most developed industrialized economies. It is one of the most stable and prosperous of the post-Communist states of Central and Eastern Europe. GDP per capita at purchasing power parity was $27,100 in 2011, which is 85% of the EU average.
The principal industries are heavy and general machine-building, iron and steel production, metalworking, chemical production, electronics, transportation equipment, textiles, glass, brewing, china, ceramics, and pharmaceuticals. Its main agricultural products are sugarbeets, fodder roots, potatoes, wheat, and hops.
Its strong industrial tradition dates to the 19th century, when Bohemia and Moravia were the economic heartland of the Austro-Hungarian Empire. Today, this heritage is both an asset and a liability. The Czech Republic has a well-educated population and a well-developed infrastructure, but its industrial plants and much of its industrial equipment are obsolete.
According to the Stalinist development policy of planned interdependence, all the economies of the socialist countries were linked tightly with that of the Soviet Union. With the disintegration of the communist economic alliance in 1991, Czech manufacturers lost their traditional markets among former communist countries to the east.
2000-2005
Growth in 2000-05 was supported by exports to the EU, primarily to Germany, and a strong recovery of foreign and domestic investment. Domestic demand is playing an ever more important role in underpinning growth as interest rates drop and the availability of credit cards and mortgages increases. Current account deficits of around 5% of GDP are beginning to decline as demand for Czech products in the European Union increases. Inflation is under control. Recent accession to the EU gives further impetus and direction to structural reform. In early 2004 the government passed increases in the Value Added Tax (VAT) and tightened eligibility for social benefits with the intention to bring the public finance gap down to 4% of GDP by 2006, but more difficult pension and healthcare reforms will have to wait until after the next elections. Privatization of the state-owned telecommunications firm Český Telecom took place in 2005. Intensified restructuring among large enterprises, improvements in the financial sector, and effective use of available EU funds should strengthen output growth.
2005-2010
Czech republic export 2007
Czech republic import 2007
Growth continued in the first years of the EU membership. The credit portion of the Financial crisis of 2007–2010 did not affect the Czech Republic much, mostly due to its stable banking sector which has learned its lessons during a smaller crisis in the late 1990s and became much more cautious. As a fraction of the GDP, the Czech public debt belongs among the smallest ones in Central and Eastern Europe. Moreover, unlike many other post-communist countries, an overwhelming majority of the household debt - over 99% - is denominated in the local Czech currency. That's why the country wasn't affected by the shrunken money supply in the U.S. dollars.
However, as a large exporter, the economy was sensitive to the decrease of the demand in Germany and other trading partners. In the middle of 2009, the annual drop of the GDP for 2009 was estimated around 3% or 4.3%, a relatively modest decrease. The impact of the economic crisis may have been limited by the existence of the national currency that temporarily weakened in H1 of 2009, simplifying the life of the exporters.
GDP (pp.): $273.1 billion (2011)
GDP Growth: 1.7% (2011)
GDP per capita (pp.): $25,934 (2011)[9]
GDP by sector: Agriculture: 2.9% Industry: 38.7% Services: 58.7% (2008)
Inflation: 1.9% (2011)
Labour Force: 5,370,000 (2008)
Unemployment: 6,5% (Jun 2011)[10]
Industrial production growth rate: 5.4% (2011)
Household income or consumption by percentage share: (1996)
lowest 10%: 4.3%
highest 10%: 22.4%
Public Debt: 41,5% GDP (2011)
Exports: $122 billion (2007) Export goods: machinery and transport goods 52%, raw materials 9%, chemicals 5%, other 34% (2003).
Imports: $116.6 billion Import goods: machinery and transport goods 46%, raw materials and fuels 16%, chemicals 10%, other 28% (2003)
Current Account balance: -$4,533,000 (2007)
Export partners: Germany 30.8%, Slovakia 8.7%, Poland 5.9%, France 5.4%, UK 5.1%, Italy 4.9%, Austria 4.6% (2007).
Import partners: Germany 31.4%, Netherlands 6.7%, Slovakia 6.4%, Poland 6.3%, Austria 5.1%, China 5.1%, Russia 4.5%, Italy 4.4%, France 4.1% (2007).
Reserves: $34.59 billion (2007)
Foreign Direct Investment: $86.75 billion (2007)
Czech Investment Abroad: $6.058 billion (2007)
External debt: $74.7 billion (2007)
Value of Publicly Traded Shares: $48.6 billion (2006)
Exchange rates:
koruny (Kč) per US$1 – 18.75 (December 2010), 18.277 (2007), 23.957 (2005), 25.7 (2004), 28.2 (2003), 32.7 (2002), 38.0 (2001), 38.6 (2001), 34.6 (1999), 32.3 (1998), 31.7 (1997), 27.1 (1996), 26.5 (1995)
koruny (Kč) per EUR€1 - 25.06 (December 2010)
Germany
Germany is the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP (PPP) in 2008. Since the age of industrialization and beyond, the industrial capitalism, the country has been a driver, innovator, and beneficiary of an ever more globalised economy. Germany is the world's third largest exporter with $1.408 trillion exported in 2011 (Eurozone countries are included). Exports account for more than one-third of national output.
Germany is relatively poor in raw materials. Only lignite and potash salt are available in economically significant quantities. Power plants burning lignite are one of the main sources of electricity in Germany. Oil, natural gas and other resources are, for the most part, imported from other countries. Germany imports about two thirds of its energy.
The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Most of the country's products are in engineering, especially in automobiles, machinery, metals, and chemical goods.[17] Germany is the leading producer of wind turbines and solar power technology in the world. The largest annual international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, and Berlin. Combination of service-oriented manufacturing, R&D spending, links between industry and academia, international cooperation and SME contribute to the overall competitiveness of the economy of Germany.
Of the world's 500 largest stock market listed companies measured by revenue, the Fortune Global 500, 37 are headquartered in Germany. In 2010 the ten largest were Volkswagen, Allianz, E.ON, Daimler, Siemens, Metro, Deutsche Telekom, Munich Re, BASF, and BMW. Other large German companies include: Robert Bosch, ThyssenKrupp, and MAN (diversified industrials); Bayer and Merck (pharmaceuticals);Adidas and Puma (clothing and footwear); Commerzbank and Deutsche Bank (banking and finance); Aldi, Lidl and Edeka (retail); SAP(computer software); Infineon (semiconductors); Henkel (household and personal consumer products); Deutsche Post (logistics); and Hugo Boss (luxury goods). Well-known global brands are Mercedes Benz, BMW, Adidas, Audi, Porsche, Volkswagen, Bayer, BASF, Bosch,Siemens, Lufthansa, SAP and Nivea.
Between 1991 and 2010, 40,301 mergers and acquisitions with an involvement of German firms with a total known value of 2,422 bil. EUR have been announced. The largest transactions since 1991 are: the acquisition of Mannesmann by Vodafone for 204.8 bil. EUR in 1999, the merger of Daimler-Benz with Chrysler to form DaimlerChrysler in 1998 valued at 36.3 bil. EUR.
Since the age of industrialisation, the country has been a driver, innovator, and beneficiary of an ever more globalized economy. Germany is a founding member of the EU, the G8 and the G20 and was the world's largest exporter from 2003 to 2008. In 2011, it remains the second largest exporter and third largest importer. It generates a trade surplus of $189.7 billion.
Macroeconomic data
GDP per capita of the Western European big four economies
Components of Gross national income
As of November 2012, the unemployment rate was 6.1 percent.
The following table lists the non-seasonally adjusted GDP growth in 1992-2012.
Year |
GDP €Billion |
Change |
2008 |
2473.80 |
+1.1% |
2009 |
2374.50 |
-5.1% |
2010 |
2496.20 |
+4.2% |
2011 |
2592.60 |
+3.0% |
2012 |
1974.701 |
+0,9%1 |
Germany Exports (2009) by Product Category. MIT/Harvard Economic Complexity Observatory.
Of the world's 500 largest stock-market-listed companies measured by revenue in 2010, the Fortune Global 500, 37 are headquartered in Germany. 30 Germany-based companies are included in the DAX, the German stock market index. Well-known global brands are Mercedes-Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bayer, BASF, Bosch, and Nivea.
Germany is recognised for its specialised small and medium enterprises. Around 1,000 of these companies are global market leaders in their segment and are labelled hidden champions.
Switzerland
The economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and political stability has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment.
Because of the country's small size and high labor specialization, industry and trade are the keys to Switzerland's economic livelihood. Switzerland has achieved one of the highest per capita incomes in the world with low unemployment rates and a balanced budget. The service sector has also come to play a significant economic role.
Switzerland's agrarian sector shrank during the Industrial Revolution. Its industrial sector began to grow in the mid-19th century, and had become the largest in Europe by the beginning of the 20th century. In October 2011, Switzerland had the highest average wealth per adult at US$540,000, making Swiss residents the richest in the world. Switzerland was the only country that had exceeded US$500,000.[15] This is said to have been because of the rising value of the swiss franc which has increased the wealth value of Swiss residents.
The exports of goods and services in the EU and the USA decreased as a result of the Swiss Franc's appreciation in value which caused an increase in prices of exported goods and services. On the other hand Switzerland's tourism sector slumped and room occupation rates by foreign guests decreased. Besides that a deficit of market competition in many branches of Switzerland's economy persisted.
On the 10.11.2002 the economics magazine Cash published 5 measures which political and economic actors were suggested to implement so that Switzerland would once again experience an economic revival:
1. Private consumption should be promoted with decent wage increases. In addition to that families with children should get discounts on their health insurances.
2. Switzerland's national bank should revive investments by lowering interest rates. Besides that monetary institutes should increasingly credit consumers and offer cheaper land zones which are to be built on.
3. Switzerland's national bank is asked to devalue the Swiss Franc, especially compared to the Euro.
4. The government should implement the anti-cyclical measure of increasing budget deficits. Government spending should increase in the infrastructural and educational sectors. Lowering taxes would make sense in order to promote private household consumption.
5. Flexible work schedules should be instituted, thus avoiding low demand dismissals.
These measures were applied with successful results along with the government's policy of the Magical Hexagon which consists of full employment, social equality, economic growth, environmental quality, positive trade balance and price stability. The rebound which started in mid 2003 saw growth rate growth rate averaging 3% (2004 and 2005 saw a GDP growth of 2.5% and 2.6% respectively; for 2006 and 2007, the rate was 3.6%). In 2008, GDP growth was modest in the first half of the year while declining in the last two quarters. Because of the base effect, real growth came to 1.9%. While it contacted 1.9% in 2009, the economy started to pick up in Q3 and by the second quarter of 2010, it had surpassed its previous peak. Growth for 2010 stood at 2.6%
The stock market collapse has deeply affected investment income earned abroad. This has translated to a substantial fall in the surplus of the current account balance. In 2006, Switzerland recorded a 15.1% per GDP surplus. It went down to 9.1% in 2007 and further dropped to 1.8% in 2008. It recovered in 2009 and 2010 with a surplus of 11.9% and 14.6% respectively. As of the first quarter 2010, Switzerland house prices are still edging up.
This is a chart of trend of gross domestic product of Switzerland at market prices estimated by the Swiss Government with figures in millions of Swiss Francs.
Year |
Gross Domestic Product |
US Dollar Exchange |
2008 |
547,196 |
1.08 Francs |
2009 |
535,282 |
1.09 Francs |
2010 |
546,245 |
1.04 Francs |
2011 |
in progress |
0.75 Francs |
Trade
