Weaker euro boosts trade prospects for struggling Europe: ECB

06/08/2012 - 11:59

FRANKFURT (Reuters) - Struggling southern European countries are becoming more competitive in their main export markets helped by the weakening euro, according to a monthly European Central Bank study of movements in consumer prices in the euro zone and economies it trades with.

Ireland gained 7.2 percent in competitiveness vis-a-vis its trading partners both within and outside the euro zone in the 12 months to July, while Greece gained 4.4 percent and Spain 4.0 percent.

Portugal and Italy also made gains, but less than their neighbors.

The common currency weakened 7.3 percent from July 2011 to the same month this year, giving all euro zone countries an advantage in markets outside the currency bloc.

All peripheral countries, with the exception of Italy, are still less competitive relative to their trading partners than they were in at the end of 1998, when the common currency was created.

Of the countries who have been bailed out or who are in trouble in Europe's debt crisis, Spain has lost most ground, followed by Greece.

During that time, Germany and Finland have gained most, 13.8 percent and 10.3 percent, respectively. They were also the bloc's fastest-growing economies early this year.

(Reporting by Sakari Suoninen; editing by Patrick Graham)