25/7/2013: Ifo Business Climate Survey for Germany: July 2013

Ifo Business Climate Index for industry and trade in Germany is out for July. The index is up at 106.2 from 105.9 in June, marking the third consecutive month of improvements. Current situation index is at 110.1 in July, up from 109.4 in June and also marking third consecutive month of gains. expectations 6 months out remained relatively static at 102.4 against 102.5 in June. Expectations are struggling to gain solid footing, suggesting that businesses are perceiving current conditions (expansion) as being still at risk.

Per Ifo release: "Conditions in the German economy remain fair. The business climate indicator in manufacturing rose slightly. Satisfaction with the current business situation increased for the third month in succession. Business expectations declined minimally, but remain positive. …After last month’s sharp in-crease, export expectations fell somewhat. Firms nevertheless expect expansionary impulses from export business."

17/7/2013: Wrong Austerity Compounds the Failures of the Monetary Union

Recent CEPR paper DP9541 (July 2013), titled "Debt Crises and Risk Sharing: The Role of Markets versus Sovereigns" by Sebnem Kalemli-Ozcan, Emiliano Luttini, and Bent E Sørensen (linked here: www.cepr.org/pubs/dps/DP9541.asp) used "a variance decomposition of shocks to GDP", in order to "quantify the role of international factor income, international transfers, and saving in achieving risk sharing during the recent European crisis."

Basic idea of the exercise was that a lack of saving in good times may reduce consumption smoothing in bad times, forcing households to cut back their spending and consumption more dramatically once recession hits.

Under perfect risk sharing, the consumption growth of individual countries should be completely independent from all other factors, conditional on world consumption growth.

The authors of the study "calculate how much of a shock to GDP is absorbed by various components of saving, in particular government saving, and other channels, such as net foreign factor income for the sub-periods 1990-2007, 2008-2009, and 2010." The key finding here is that "overall, risk sharing in the EU was significantly higher during 2008-2009 than it was during the earlier period, but total risk sharing more or less collapsed in 2010." Notably, 2010 is the year when European economies embarked on 'austerity' path, primarily and predominantly expressed (especially in the earlier stages) in tax increases. It is worth noting that there virtually no reductions in public spending during 2009 or 2010 across the EU and even in countries where spending was cut, such as Ireland, much of the reductions came from indirect taxation - e.g. transfers of health spending from public purse to private insurance.

Further, the authors "study how the crisis a affected risk sharing for "PIIGS" countries (Portugal, Ireland, Italy, Greece, and Spain), which were at the center of the sovereign debt crisis, compared to non-PIIGS countries (Austria, Belgium, Denmark, Finland, France, Germany, the Netherlands, Sweden, and the United Kingdom)."

Again, the findings are revealing: "For 1990-2009, risk sharing was mainly due to pro-cyclical government saving but the amount of risk sharing from government saving turned negative in 2010 for the PIIGS countries: government saving increased at the same time as GDP decreased." In other words - this is the exact effect of austerity as practised by the EU periphery.

"For [euro area peripheral] countries our measure of overall risk sharing turns negative because (conditional on world consumption growth) the decline in GDP in 2010 was accompanied by a more than proportional decline in consumption. This mirrors the behavior of emerging economies where government saving typically is counter-cyclical as shown by Kaminsky, Reinhart, and V egh (2005)."

Crucially, the study shows that there is basically no risk-sharing mechanism that operates on the entire euro area level. Even common currency zone - via lower interest rates - does not deliver risk sharing in 2010 and has potentially a very weak effect in 2008-2009 period. Worse, for the euro area peripheral states, euro has been a mechanism that seemed to have removed risk sharing opportunities both in and out of the crisis:

"…although non-PIIGS countries shared a non-negligible amount of risk during 2000{2007 while the PIIGS shared little risk in those years: in the good year 2005, consumption increased faster than GDP leading to "negative risk sharing." In 2008 and 2009 the major amount of GDP risk is shared for non-PIIGS with low consumption growth rates in spite of large drops in GDP, with the amount of risk shared in 2008 over 100 percent (positive consumption growth in spite of negative GDP growth). For the PIIGS, consumption declined very little in 2008 in spite of a large drop in GDP, while the drop in GDP in 2009 clearly led to declining consumption and, in 2010, consumption fell by almost as much as GDP, indicating little risk sharing."

Top line conclusion: once the authors "decompose risk sharing from saving into contributions from government and private saving", data reveals "that fiscal austerity programs played an important role in hindering risk sharing during the sovereign debt crisis."

4/7/2013: Blackrock Institute Surveys: North America, Europe and EMEA: June 2013

Two charts showing most recent consensus expectations on North American, Western European and EMEA economies from the Blackrock Investment Institute panel of economists (note: these do not represent views of Blackrock).

Notice clustering of peripherals and France, as opposed to marginally better clustering of the Netherlands, Sweden, Belgium and Eurozone.

Note Ukraine as the sick man of the region. Also note Slovenia and Croatia - two EU economies that are significantly under-performing the regional grouping.

4/7/2013: Blackrock Institute Surveys: North America, Europe and EMEA: June 2013

Two charts showing most recent consensus expectations on North American, Western European and EMEA economies from the Blackrock Institute panel of economists (note: these do not represent views of Blackrock).

Notice clustering of peripherals and France, as opposed to marginally better clustering of the Netherlands, Sweden, Belgium and Eurozone.

Note Ukraine as the sick man of the region. Also note Slovenia and Croatia - two EU economies that are significantly under-performing the regional grouping.

24/6/2013: Ifo Business Climate Survey for Germany: June 2013

German economy continues to grow, per latest Ifo Business Climate Survey for June 2013:

Basically, all three core indicators are above the water (>100), with

• Business Climate reading at 105.9, up on 105.7 in May and 105.1 in June 2012. 
• Business Situation reading slipped slightly to 109.4 in June from 110.0 in May and is down on 113.8 recorded in June 2012.
• Business Expectations forward are actually relatively soft at 102.5 in June, up on sluggish 101.6 a month ago and up on contractionary 97.1 in June 2012.
• Dynamics wise, Climate and Expectations readings in June were ahead of their 12mo average through May 2013, but Situation reading is basically flat. On 6mo average through May comparative, all indices are ahead of the average in June, save Climate which is flat.

Of four core subsectors, however, only Manufacturing is above water on expectations side. 

Net: strong performance, given prevailing conditions in the global and euro area economies, but no massive fireworks.

15/5/2013: Italy v Spain in Big 4's Sickest Economy contest

More unpleasant stuff from the Euro zone. Headlines in the morning today:

• Italian banks suffer the worst credit crunch in their history with banks credit down 2.12% in March 2013 y/y, according to the Italian Banking Association (ABI);
• Meanwhile, bad loans have reached €64.3bn in March, rising by 4.3% y/y and by 33% m/m. 
• Italian banks loans to households and non-financial companies dropped 3.1% in March y/y, falling to €1.46bn. 
• Italian industrial production fell 5.2% in March y/y, the worst figure in the Eurozone’ Big 4 economies. Industrial production was down 1.5% in Germany in March and 1.6% in France.
• The Italian housing market activity its now at lowest level since 1985. Last year 448,364 properties were sold, or 27.5% fewer than in 2011 and only 18,000 ahead of 1985 sales. 

It looks like Italy is going head on into competing with Spain for the title of the Big 4's sickest economy.

30/4/2013: The horrors of Euro-austerity: Part 1

The horrors of Euro-austerity are so vivid in this chart...

It is obvious (to anyone who is economically blind or illiterate in a basic Cartesian sense) that 'sustaining growth' would have required deficits of ugh... ogh... like... say 5% pa over 2009-2013 period? Or 6%? To cumulate these to over 25-30% of GDP in added debt? What could have possibly gone wrong?..

19/4/2013: Watch out for overheating Euro area growth...

Ifo Institute issued its updated forecasts for Germany and Euro area 2013-2014. Here are the summaries:

As Euro area aggregate forecast shows, the European Century is rolling on with expected 0.4% annual expansion in real GDP in 2013 and 0.9% roaring growth in 2014 expected. Meanwhile, the speedy engine for Euro area growth - Germany - is expected to post 0.8% boom-time growth in 2013 and globally impressive, future path-inspiring expansion of 1.9% in 2014.

Clearly, we must be watching out for a positive output gap emerging soon, as both economies will be overheating in the next 19 months from all this tremendous growth...

6/3/2013: BlackRock Institute Economic Cycle Survey 03/2013

BlackRock Investment Institute has released the latest results from its Economic Cycle Survey for EMEA and North America & Western Europe.

Before looking at the results, note:

1. The survey represents the summary of the views of a panel of economists polled by the BlackRock Investment Institute, and not the view of the Institute itself
2. In some instances, survey covers small number of responses (see two tables below detailing the depth of coverage), with low coverage corresponding to survey results being indicative, rather than consensus-conclusive.

So core results for North America and Western Europe regions:

In effect, little change from the previous surveys for Ireland, which remains solidly decoupled in terms of economists consensus from the peripheral states (the latter are all clustered in the upper RHS corner, corresponding to both high expectations of continued recession and current indicator of the present recession). In the case of Ireland, it is obviously very hard to tell whether or not Ireland is currently in a recession. Both GDP and GNP changes q/q and y/y do not warrant official designation of a recession, but nonetheless the economy is running at well below its potential capacity.

Per chart above, it is clear that despite the Eurostat projections for 2013 growth, Ireland does not lead the Euro Area in terms of forward expectations for economic growth when it comes to the economists' assessment.

Now on to EMEA results:

Pretty much predictable weakening of Russian growth for 2013 is reflected in the above. Two other interesting points:

1. The weakest performing states in terms of current conditions and expectations are the ones with closest ties to (and membership in) the Euro zone;
2. Weak performance for the Ukraine is reflective of the country continued political mess and the lack of sustainable fundamentals in terms of the country orientation vis-a-vis its main trading partners (the contrasting reality of the private sector closely tied into the CIS and more precisely Russian markets for investment and trade, juxtaposed by the political re-orientation toward Europe).

Note: here are the tables detailing the extent of the survey coverage depth:

22/02.2013: A small cloud over German economy's silver lining

Released today, the Ifo Business Climate Index for German industry and trade "rose significantly by over three points in February. This represents its greatest increase since July 2010. Satisfaction with the current business situation continued to grow. Survey participants also expressed greater optimism about their future business perspectives. The German economy is regaining momentum."

These are positive news for the German economy and it needed some cheer up. But, alas, good news, like every proverbial silver lining, do come with small clouds attached. Since I am not in the business of spinning the same story as everyone else, I will focus on some of these clouds in the note. You can read the actual press release and see data here: http://www.cesifo-group.de/ifoHome/facts/Survey-Results/Business-Climate/Geschaeftsklima-Archiv/2013/Geschaeftsklima-20130222.html

Good stuff: "In manufacturing the business climate indicator rose sharply. This was specifically due to a considerably more optimistic business outlook. Manufacturers also expressed greater satisfaction with their current business situation. Export expectations increased and are now above their long-term average once again."

"In construction the business climate index continued to rise sharply, primarily due to a far more optimistic business outlook. The business outlook reached its highest level since German reunification. Satis-faction with the current business situation also continued to grow."

Truth be told, in the industrial sectors, the entire rise in the index can be explained by the above two sectors, with wholesale and retail sectors staying at and below the zero mark (respectively). Internal economy seems to be still in poor shape, although the rate of decline clearly dropped in wholesale sector, whilst accelerating in the retail sector.

In services, business climate also rose impressively, but the entire increase was due to business expectations, while the current situation assessment deteriorated.

What worries me more is the headline indices for all sectors.

• Business Climate index rose to 107.4 in February 2013 - up +3.0% m/m, but it was down 1.9% y/y. 3mo average through February 2013 is at 104.7, up on 101.0 3mo average through November 2012, but down 3.4% on the 3mo average through February 2012.
• Business Situation improved much less dramatically and is lagging well behind overall climate reading. The sub-index on current situation rose to 110.2 in February 2012 (+1.9% m/m), but is down 6.1% y/y. 3mo MA through February 2012 is down 7.2% y/y.
• As the result, most of the gains in the overall Climate reading were due to, yep, expectations of future changes. Expectations rose to 104.6 in February, up 4.0% m/m and up 2.3% y/y. Expectations were also up on 3mo average reading +0.6% y/y. 

The latter point is problematic. You see, expectations surveys of businesses are often more indicative of the direction, rather than of the magnitude, of future changes. And so is the case with the Ifo index.

Per chart above, whilst current conditions are strongly correlated with the business climate in the same period, it turns out that future expectations are much more strongly linked with current climate (and conditions) than with what they are supposed to predict - namely, future conditions. In fact, the same result holds regardless of whether we choose a forward lag on expectations 6mo out or 12mo out. There is simply no connection between m/m changes in reported expectations and the future business climate realisations.

So, while we sound victory trumpets around the headline 'strong rise' in the Ifo index, we should be aware of the fact that most of this rise is indeed being driven by highly suspect expectations.

But wait, things are even worse than that. Take a look at historical volatility in indices. Based on two standard deviations metrics (sample and population), m/m changes in sub-indices post historical standard deviations of 1.4 for Business Climate, 1.7-1.8 for Business Conditions and 1.7 for Expectations. Which, basically, means that 3% rise in headline index was basically statistically indifferent from zero change, and likewise was 1.9% rise in Business Conditions index. Only the 4.0% hike in Business Expectations was possibly statistically significant.

So here wi have it - the most questionable in quality indicator was the most influential driver of the February gains and was also the most likely candidate for being statistically distinct from zero in terms of its m/m expansion.

13/2/2013: CESIfo Index shows improvements in Global Economy

CESIfo institute has issued its analysis of the global economy and... some good news: per CESIfo index tracking global growth, world economic climate indicator finally is up after two consecutive declines.


The increase in the index "was mainly driven by significantly more positive assessments of the 6-month [forward] economic outlook." At the same time, "assessments of the current economic situation improved only slightly. After 6 months of stagnation, the prospects for the world economy seem to be brightening."

• Asia led the global index rise, with region index "now higher than its long-term average once again. Both assessments of the current economic situation, and especially expectations, have brightened considerably." 
• In the case of North America "the rise in the economic climate indicator was mainly due to improved assessments of the current economic situation. Despite the improvement, the current economic situation is not completely satisfactory in this region." 
• Per CESIfo release: "The current economic situation is also unfavourable in Western Europe. Assessments of the 6-month [forward] economic outlook, on the other hand, were significantly more positive, which led to a moderate overall improvement in the economic climate." 

CESIfo Index panel "on average expect short-term interest rates to remain largely unchanged over the next six months. However, they believe that long-term interest rates are set to increase slightly. On worldwide average, economic experts expect moderate growth in the value of the US dollar over the next six months."

13/1/2013: Decoupling: US v Euro Area 2011-2060

Another interesting chart that speaks volumes about the topic I have been highlighting now since ca 2002-2003. The topic is the concept of 'decoupling' from growth momentum. Back prior to the crisis, European media loved the theory of China (or Emerging Economies, etc) displacing the US as the core drivers of global growth and, ultimately, as the centre of global economic power. At the same time, Brussels 'leaders' were keen stressing the theory of the European Century - the 21st century as the period of revival of Europe.

My reply to that was, and still is, that while the US share of global output is shrinking against rising EMs and BRICS share (S for South Africa) and while this trend is likely to continue into the future, it is the EU (more significantly, the euro area) that is dropping out of the global story by outpacing the decline of the US relative predominance. Much of this born out in the IMF projections. And here is a nice and concise OECD graphic for that:

So between 2011 and 2060 (yes, I know - time horizon very vast and thus forecasts very tentative), the US share of global GDP is expected to drop significantly: from 23% to 16% - a decline of under 38.5%. In the same period, euro area share is expected to shrink from 17% to 9% - a decline of just under 47.1%. Of course, Japan's importance to the global economy is likely to fall even more - by over 57.1%.

All in, the 'decoupling' (and I don't really like this term, because it implies removal of the OECD economies activity out of global activity, which is not happening) will take US, EA17 and Japan share of global output from 47% in 2011 to 28% in 2060 according to the OECD projections. 42.1% of this decline will be accounted for by the EA17, 36.8% by the US and 21.1% by Japan.

I don't think the 21st Century is shaping up to be the Age of the Euro...

2/1/2013: Euro area PMIs - dire state of economy persists through December

More on PMIs trail: euro area PMI for Manufacturing, per Markit, implies that "Eurozone manufacturing ends 2012 mired in recession, as demand from domestic and export markets remains weak".

Details:

• Final Eurozone Manufacturing PMI at 46.1 in December (flash estimate 46.3), down from 46.2 in November. Effectively, the rate of contraction continues unabated and we are in the seventh consecutive month of contracting output.
• Downturn remains widespread, with all nations bar Ireland reporting contractions (I will update Ireland database once I am back in Dublin).
• Cost caution leads to job losses and further scaling back of inventory holdings.
• Downturns accelerated in Germany, Spain, Austria and Greece, but eased in France, Italy and the Netherlands. 
• Greece remained bottom of the PMI league table, still well adrift of the next-weakest performing nations France and Spain.
• Eurozone manufacturing production declined for the tenth successive month in December, as companies were hit by reduced inflows of both total new orders and incoming new export business.
• However, over Q4 2012 as a whole, the average rates of decline in both output and new orders were the slowest since the opening quarter of the year.
• The latest decline in  new export orders took the current sequence of contraction to one-and-a-half years, despite the rate of reduction easing slightly to a nine-month low.
• Only Spain, the Netherlands and Ireland saw increases in new export orders during December, although the trend in Italy also moved closer to stabilising. In contrast, Germany, France and Greece all reported substantial declines in new export business.
• Employment in manufacturing is now in contraction for 11 consecutive months.
• Selling prices were unchanged, although this was nonetheless an improvement on the discounting reported in the prior six months. 
• Input cost inflation eased and was the weakest during the current four-month sequence. 
• Profit margins continued to shrink.

2/1/2013: Netherlands Manufacturing PMI for December: Not Pretty

Regular readers of this blog know that I like referencing the Netherlands as the 'leading' indicator for the Euro area growth for a number of reasons:

1. The Netherlands have a stable, even 'boring' economic make up, combining (despite a relatively small size) healthy drivers of domestic demand and investment with robust exporting economy;
2. The Netherlands supply side of the economy is also relatively well balanced with strong domestic and exports oriented manufacturing and services;
3. The Netherlands are a major entry port for the Euro area imports and the shipping and logistics hub for its exports;
4. The Netherlands are well-positioned to serve as lead indicators for household investment cycles changes.

With that in mind, yesterday's PMI for Manufacturing is disappointing:

Several things come to view:

• Dutch manufacturing posted a "broadly flat output in December. This reflected a combination of a slower fall in new orders and a further reduction of backlogs. Jobs were cut at a weaker rate, while input price inflation eased and output charges were raised at a faster pace. 
• NEVI  PMI rose to 49.6 in December from 48.2 in November, marking the highest reading in three months. Despite this, the index remained below 50.0, implying stagnation-to-reduction in activity. The index is compounding, which means that December decline came on top of declines in November and October.
• New orders fell for the third month running in December, although at slowest rate of decline.
• Export sales rose for the sixth consecutive month, although the increase was the slowest in 6 months period.
• Input prices eased, but remained in strong inflationary territory, while output prices rose modestly. This means profit margins shrunk.

Not quite ugly, but certainly not pretty.

30/11/2012: 'Other' European SOE is back in growth

While the euro area zombie economy continues to contract (more on this later tonight) that shrunk 0.6% y/y in Q3, Swiss economy is expanding, after posting a contraction in Q2 2012. That's right - that 'other Europe' SOE is expanding despite the fact CHF is tied to the sick euro. Swiss economy grew 0.6% q/q in Q3 2012 at annualized rate of 2.3%, beating consensus expectations (+0.2% q/q). In Q2 2012 Swiss economy contracted 0.5% annualized.

Today’s GDP data were encouraging but other indicators including the manufacturing PMI (see chart below) have remained weaker recently. Overall, our forecasts for Swiss GDP growth remain unchanged: 1.0% for the full year 2012 and 1.5% for 2013. Y/y growth was +0.3% in Q2 2012 (a downward revision from +0.5% estimate) and +1.4% in Q3 2012.

Swiss growth was driven by exports which rose 1.2% y/y in Q3 2012 and domestic consumption which was up 2.5% y/y. However, fixed investment fell on quarterly basis, although remaining up 1.4% on y/y basis.

Switzerland recorded an increase of 2.8% in foreign resident population (inward migration) between 2010 and 2011 - a trend that is most likely remained in 2012. In Q3 2012 employment grew at 1.9% y/y and is now 1.9% above the pre-crisis peak levels. Meanwhile, euro area employment is 2.6% below the pre-crisis peak levels, while in the US employment is still 3.1% down on pre-crisis levels.

23/11/2012: Global & Irish Outlook: few slides

My slides from today's presentation on the longer-range outlook for the Irish economy (and global) - you can click on each slide to open a larger image:

5/10/2012: Remember when US was 'decoupling'?

Really cool stuff: Euro area and US default probabilities divergence (via Citi Research):

And on related note of Euro area divergence, US is posting some nice figures today on NFPs, implying this.

Now, remember the days when European 'leaders' were bragging about the US decoupling from the rest of the world?.. Well, it looks like the US, along with the rest of the world, is decoupling from Europe.

23/8/2012: More time for Greece is not an asnwer

As Greek PM, Samaras, heads for talks with Angela Merkel this Friday, here's why 2 more years won't work for Greece: link here.

22/6/2012: Don't rush with that 'Germany Imploding' headline, mate

So the silly season of 'Germany is collapsing' is on again today with the release of the Ifo Index and the subsequent media charade on foot of yesterday's PMIs.

Now, let's take a look at the thesis so beloved by on-line business media hacks. Is Germany really caving in?

Headline Business Climate Index from Ifo:

What do the numbers tell us?

• Headline Business Climate index fell from 106.9 in May to 105.3 in June - a monthly drop of 1.5%. Previous monthly drop was steeper at 2.7%, but 'business media' missed that.
• Year on year, the index is down 7.9% - steeper than back in May when it fell 6.4% y/y.
• 3mo MA is down 1.7% on previous 3mo period and is down 5.9% y/y.
• 6mo MA is at 108.3 same as 12mo MA and the last two months both came in at below that. But the 3mo MA is at 107.4 - and that is probably more significant of an indicator than monthly readings. 
• June reading is the lowest since March 2010 - the headline that many captured in their reports.

So things are not great. But are the schloss walls caving in? Look at the historical chart above. Current reading. Current 3mo MA is 107.4 - well ahead of historical average of 100.8 and crisis-period average of 103.2.

Next, take a look at the components of the index:

• Business Situation sub-index actually improved in June to 113.9 from 113.6 in May. So last m/m move was +0.5% against previous m/m move of -3.6%. Y/y comparatives are less pleasant: June 2012 y/y index fell 7.5% against May 2012 y/y fall of 6.7%. 3mo MA fell 1.8% on previous and 5.7% y/y. 
• Overall Business Situation sub-index remain weak - marking second lowest reading since August 2010. And it is below 12mo MA of 117.0 and 6mo MA at 116.0 both in level terms and in 3mo MA terms. Still, the sub-index is well ahead of 101.7 historical average and 107.1 crisis-period average.
• Business Expectations sub-index fell 3.6% m/m in June to 97.3 compounding the fall of 1.8% in May. Y/y sub-index is down 8.3% in June after -6.0% drop in May. 3mo MA is down 1.7% on previous and down 6.2% on same period in 2011.
• At 100.3 3moMA is now below 6moMA at 101.2 but is identical to 12mo MA at 100.3. The 3moMA for the sub-index is basically tracing the historical average of 100.2 and is only slightly ahead of the crisis-period average of 99.7.
• Sub-index is now at the lowest point since October 2011.
• But I wouldn't read too much into expectations sub-index, which tends to reflect the mood of the day, rather than act as a true leading indicator.

So overall, things are weak. The weakness is not accelerating in m/m terms, but is accelerating in y/y terms. Short-term averages are performing in line with June trends. Not a happy place, but not quite Armageddon either.

20/3/2012: There is nothing new about Europe's growth crisis

EU's latest catch phrase is 'growth'. The Commission is banging on about subsidies along with an old tune of EU2020 'plan' for subsidies, picking of winners and rewarding the whiners. The IMF is whinging about 'structural reforms' which is all about extracting some sort of a surplus from something other than domestic consumers demand and investment. National authorities are singing the diverse songs - calling for subsidies and more borrowing from the North in the Periphery, calling for less transfers to the Periphery in the North. Belgium, as ever stuck in-between, has all of the above to the detriment of national dis-unity, which by now is a second-stage show, given all the dis-unity in the European Union.

And the reality is - EU and especially the Euro area are falling out of the world's economic orbit, with speeds that are accelerating - from the modest declines of the 1980s to faster rates in the 1990s and to acceleration in 2000s followed by speedier 2010s.

Note, all data below is sourced from the IMFWEO database with my calculations based on the same.

Here's how the mighty have fallen:

And no, the above charts do not show us performing any better than the US or G7. They show us performing as badly as Italy and worse than Japan:

• Between 1980 and 2010, Italy's share of world GDP fell 46.7%, Euro area's share declined 47.1%, Japan's dropped only 32.8%.
• Between 2010 and 2016, based on IMF projections, Euro area's share of world GDP will decline 15.2%, US' share will drop 9.7%, Germany's 15.0%, France's 13.6%, Italy's 19%, Japan's 15.7%
• In the Decade of the Euro, Euro area's share of world GDP declined 20.7%, while during the decade of the 1990s it fell 15.0% and in the decade of the 1980s it declined just 7.5%

No matter how you spin it - Euro area is going down in world rankings of growth areas and it is moving at the speed worse than the one attained by Japan. 

The last chart above clearly shows that the rate of Euro area's might decline has accelerated dramatically since 2001 and that this rate is invariant to the current crisis.

More subsidies, Brussels, please! More 5-year plans for 'Knowledge, Green, Social, Whatnotwellhaveit Economy', Commission, please! They all have been working so well so far.