Is Spain Becoming Semi-Core?


The semi-core bloc is growing as countries reap the benefits of past structural reform and maintain growth momentum. We argue that spain may indeed be transitioning to a more semi-core status in line with market pricing.

Previous to the crisis, and with some distinct exceptions, a map of the euro area divided the core in the North (Netherlands, Germany, for example), the periphery in the south (Spain, Portugal, Italy) with the semi-core riddled throughout the region (France, Belgium). The reality, however, was an economic landscape:

  • The core: super competitive with sustainable current account surpluses
  • The semi-core: somewhat competitive with roughly balanced current accounts
  • The periphery: strongly non-competitive with large current account deficits

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