Private Foreign Investment Rises for Eurozone Periphery

January 29th, 2013
in econ_news, syndication

Econintersect:  Foreign investment in the crisis-hit Eurozone periphery (Spain, eurolifeperserverItaly, Portugal, Ireland and Greece) rose significantly in December.  The Financial Times reports that nearly €100 billion ($133 billion) was invested by private parties from outside the region in the last month of the year.  This is a significant amount of money: If that rate were annualized the investment amount would exceed the combined economic output of those countries according to calculations attributed to the Dutch bank ING (NYSE:ING) by the FT.

Follow up:

The inflow in December is less than 25% of the total outflows of private capital in the first 11 months of 2012, which totaled over €400.

ECB (European Central Bank) president Maroi Draghi has been optimistic about the outlook for the Eurozone.  From the FT:

The return of capital has encouraged policy makers to believe the eurozone crisis is over, with Mr Draghi this month pointing to “positive contagion” in the region. The euro has also moved sharply higher.

The improving economic situation in the Eurozone is reflected by the 11% rise of the euro since it flirted with $1.20 in July.  However, the currency has yet to exceed its high point of the last 12 months achieved in late February.

Click on chart for larger image.



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