The document presents an analysis of economic adjustments in the Euro area, particularly focusing on inflation, unit labor costs, current account balances, and government debt across different countries from 1999 to 2011. It highlights trends in Baltic states compared to the Euro area, including GDP growth, labor costs, and government balances. Data is sourced from Eurostat and the European Commission and is illustrated through various charts and rankings.

1. Economic adjustment in a
monetary union
Jürgen Stark
Member of the Executive Board
of the ECB
Latvijas Banka annual conference
Riga, 12 October 2011

2. HICP inflation in euro area countries
7
1999-2008 2009 2010
6
5
4
3
2
1
0
-1
-2
-3
SK SI EE IE GR ES PT LU CY MT IT NL BE EA FR AT FI DE
Source: Eurostat.
Note: Countries are ranked in descending order according to the average value in the period 1999-2008.
2

3. Unit labour costs in euro area countries
Euro area Germany France Italy Spain
Netherlands Belgium Austria Greece Ireland
Finland Slovakia Luxembourg Portugal Slovenia
Cyprus Malta
145 145
140 140
135 135
130 130
125 125
120 120
115 115
110 110
105 105
100 100
95 95
98
99
00
01
02
03
04
05
06
07
08
09
10
11
19
19
20
20
20
20
20
20
20
20
20
20
20
20
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Source: Eurostat.
Note: The unit labour cost indices are set to 100 in the last quarter before the euro area accession of the respective country.
3

4. Current account balances (% of GDP) in euro area countries
Average 1999-2008 2009 2010
10
5
0
-5
-10
-15
LU NL FI BE DE AT EA FR IT IE SI MT ES CY SK PT EE GR
Source: European Commission, Spring 2011.
Note: Countries are ranked in descending order according to the average balance in the period 1999-2008.
4

5. General government gross debt (% GDP) in euro
area countries
180
160
140
2007 2010 2012
120
100
80
60
40
20
0
GR IT IE PT BE Euro FR DE AT ES MT CY NL FI SK SI LU EE
area
Source: European Commission, Spring 2011 projections for 2012.
Note: countries are ranked in descending order according to the value in 2012.
5

6. Real GDP in the Baltics and the euro area
(levels; sa & wda data; Q1 2005=100)
Estonia Latvia
Lithuania Euro area
135
130
125
120
115
110
105
100
95
90
2005 2006 2007 2008 2009 2010 2011
Source: Eurostat. Latest data: Q2 2011.
6

7. Unit labour costs in the Baltics and the euro area
(sa & wda data; Q1 2005=100)
Estonia Latvia
Lithuania Euro area
200
190
180
170
160
150
140
130
120
110
100
2005 2006 2007 2008 2009 2010 2011
Source: Eurostat. Latest data: Q2 2011.
7

8. General government balance (% GDP) in the Baltics
Estonia Latvia Lithuania
4
2
0
-2
-4
-6
-8
-10
2005 2006 2007 2008 2009 2010 2011 2012
Source: European Commission, Spring 2011 projections for 2011 and 2012.
8

9. GDP per capita in EU countries as % of euro area
1.4
1.2 1999 2004 2010
1.0
0.8
0.6
0.4
0.2
0.0
AT
FR
IT
CY
GR
MT
PT
HU
LT
LV
CZ
RO
DK
SK
NL
FI
GB
SI
PL
IE
SE
BE
DE
Euro area
ES
EE
BG
Source: Eurostat.
Note: countries are ranked in descending order according to the value in 2010. Luxembourg is excluded from this chart.
9

10. Employment in the Baltics and the euro area
(levels; sa & wda data; Q1 2005=100)
Estonia Latvia
Lithuania Euro area
115
110
105
100
95
90
2005 2006 2007 2008 2009 2010 2011
Source: Eurostat. Latest observation: Q2 2011.
10