Converging by diverging

Article Abstract:

Peripheral economies in Europe are growing faster than Italy, Germany and France, and benefit from lower labor costs . Low interest rates have led to an increase in investment and consumption in peripheral countries such as Ireland, Portugal, Finland and Spain. Budget surpluses are increasing as a result of strong growth, which may be sustainable for some years. Overheating is a possible risk, but divergent growth rates may help peripheral economies to achieve the same living standards as the central economies.

Gross domestic product, Western Europe

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Converging hopes

Article Abstract:

The Czech Republic, Hungary and Poland have performed well, and there is hope that they can continue to do so, despite the problems of Russia. Stock prices in central Europe were affected by the Russian default in Aug 1998, but there has since been a recovery. The currencies have been strong despite the drop in value of the Russian ruble, and interest rates have been reduced. Links with the European Union (EU) have helped these economies though there could be problems if EU economies are hit by a downturn.

Eastern Europe, International relations, Central Europe

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Converging on the streets: Spain

Article Abstract:

Only 50% of Spain's unemployed are eligible for government unemployment insurance. The May 28 half-day strike hopes to force the Socialist-led government to extend benefits to more idle workers. The government claims the addition to the deficit jeopardizes entry into the European Monetary Union.

Labor relations, Spain, Welfare reform, Unemployment insurance

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