The European Union: Fourth Quarter Balance of Payments

The 27 countries in the European Union reported a current account deficit of $2.8 billion for the fourth quarter of 2007, a decrease of $18.4 billion from the third quarter. A major factor in the decline was the reduction in the deficit of the United Kingdom, which declined from $29.7 billion to $8.2 billion. (See the first chart.) For the year as a whole the deficit declined from $82.9 billion in 2006 to $72.4 billion in 2007.

Within the European Union, the fifteen countries of the Euro Area reported a surplus of $11.0 billion in the fourth quarter, a decline from the $13.6 of the third year. For the entire year, 2007, the Euro Area reported a surplus of $26.4 billion in contrast to a deficit of $1.3 billion in 2006. The second chart compares the current account balances of the entire EU area and the Euro Area.

In the fourth quarter the EU reported surpluses with the United States ($33.6 bil.), Switzerland ($9.2 bil,), Canada $4.9 bil.), India($2.2 bil.) and Hong Kong ($2.2 bil.); and deficits with China (38.6 bil.), Russia ($8.7 bil.) and Japan ($6.2 bil.).