Eurozone

Croatia today becomes latest nation to enter the European Union. This itself is a remarkable achievement as less than 20 years ago, Croatia was a party to a fratricidal war that tried to break the former Yugoslavia into ethnically pure geographic regions and included the mass murder of civilians of other ethnic groups.

Although it is now long over, the EU’s newest member still faces considerable economic and demographic challenges to bring it in line with EU norms. Life expectancy at birth for men, for example, lags the rest of the EU by nearly four years and its GDP per capita is only 61 per cent of the EU average.

Moreover, it cannot count on a growing population to boost its economic output; its fertility rate at 1.4 per woman is not only below the level needed to keep population stable, it is lower than the EU average of 1.57 births per woman.

Croatia charts

Source: Thomson Reuters Datastream Read more

Valentina Romei

Following on from 10 charts (part 1), which included the first five challenges facing the next Italian government, here are the next five as we head towards Italy’s general election.

1) Corruption

Corruption is a plight for the country that together with bureaucracy prevents an efficient allocation of resources and discourages investment. Transparency International’s Corruption Perceptions Index ranked Italy 72nd out of 182 countries evaluated in 2012, three positions lower than the previous year. The perception of corruption of Italians is particularly high for the political system, which is one of the main reasons for the country’s political instability and poor governability.

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Italy goes to the polls on February 24 and 25, after Mario Monti, the country’s technocratic prime minister, announced his resignation in December. He is attempting to safeguard his legacy by standing as a campaigning politician, but Mr Monti faces strong competition.

This interactive graphic shows Italy’s economic standing and its regional disparities and what the newly elected government will have to grapple with once it comes to power.

Valentina Romei

The UK Department for Transport is under fire over the cancellation of a deal to award a rail franchise, because of “technical flaws” in the bidding process.

The incident brings the British railway system back into the headlines, where it has often been because of contested fare rises. Complaints about the railways may be something of a national sport, but according to a survey published last month by Eurobarometer, the European Commission body that analyses public opinion, people in the UK are more satisfied with their national and regional rail system than most of their European counterparts. Read more

Kate Allen

Angela Merkel has been making much of Germany’s predominant role in the EU’s trade relationship with China – the oft-touted ‘special relationship’. The EU overtook Japan as China’s main source of imports back in 2011, and Germany is the biggest contributor to that. But Europe’s elevated status is not due to its own export growth; rather, it is due to Japan’s continuing performance slide.

Chinese imports

Source: IMF/Haver Analytics

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Martin Stabe

The latest data from the FT/Economist Business Barometer, the quarterly global business sentiment survey, was published last week and the business-friendliness section again made for interesting reading.

France’s “business friendliness” has plummeted since the last barometer survey, which was conducted before before the election of François Hollande as president. For the first time, more of the business executives surveyed by the EIU rated the country’s ”unfriendly” than “friendly” to business. Read more