>Which countries benefit from a weak euro? (NATIXIS)

It is likely that the euro will continue to depreciate against the dollar, not so much because of the euro zone’s institutional problems as above all because of the weakness of its economy and the fact that the dollar is being shored up by the central banks of emerging and oil-exporting countries. Which countries would benefit from a persistently weak euro? Most analysts reply that it will be Germany because of the heavy weight of its industry but is this certain?

• Germany has above all gained market share within the euro zone, imports a great deal from emerging countries due to outsourcing and manufactures high-end products for which demand is relatively insensitive to price; this implies that the euro has little effect on Germany;

• countries which have a weak export capability and significant trade deficits (Spain) are normally the losers if the euro depreciates, since the predominant effect of the euro’s depreciation on these countries is to increase the prices of imports;

• countries that continue to have a substantial industrial sector but which is oriented more to the mid-range or which is in direct competition with companies in the dollar zone (France, Italy) are normally those which gain the most from the euro’s depreciation.
  

Contrary to accepted wisdom, neither Germany nor Spain would benefit from a weak euro.

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