The eurozone crisis certainly provides a convenient excuse but it doesn’t really explain why the UK’s export performance has been so poor relative to its continental competitors. The latest projections from the European Commission suggest that the UK’s export performance in 2012 will be one of the worst in the EU. A likely 0.2 per cent gain compares dismally with projected increases of 3.9 per cent for Germany, 2.6 per cent for France, 2.1 per cent for Spain and 1.1 per cent for Italy. Even Greece does better, with an expected gain of 0.8 per cent. None of these figures is particularly impressive, but in a sea of mediocrity, the UK stands out for all the wrong reasons.
In a world of fixed exchange rates export performance is vital.
In a world of floating exchange rates it doesn’t matter a toss. For exports are our labour and resources that we send abroad for foreigners to enjoy. So we export less? We enjoy more of our own labour and resources.
The only point of exports in this floating rate world is, eventually, to pay for the things that Johnny Foreigner can supply us with better than we can make ourselves.
We’re just no longer in an “Export of Die!” world, yet all too many people seem to think we are.