News Summary Blog 4

http://www.hellenicshippingnews.com/News.aspx?ElementId=f716afb5-5fbf-45b8-9e0c-81601b08e265

1.  For the first time since 1971 Spain has reported a monthly trade surplus. A trade surplus is usually seen as a positive since during a trade surplus a nation has control over most of its currency, but this surplus is only indicating a large slump in imports rather than an increase in economic activity. Comparing the month of March this year to the month last year Spain has experienced a 15% decrease in imports. The trade surplus in march was reportedly 634.9 million euros. Exports also suffered a 8.1% decrease in March this year, but overall exports have increased by 2% this year. The Economy Ministry has said that this process will continue unless countries begin to reorient its sales to markets where the economy is more favorable such as the Middle East, Africa, and the United States. This week, Figures showed that the Eurozone is in its longest recession on record. Spain is the Eurozone's fourth largest economy and its unemployment rate has reached 26.7% this year.

2.  This issue relates to part 4 of the country profile. In that post I found that Spain earns about $293.2 billion a year (2009) from imports. The 15% decrease in imports will hurt Spain's economy even more. For that assignment I also found that Spain imports so many things because of their lack of resources in the country. It is estimated that 1.813 million barrels of oil are imported into the country each year. The article did not specifically mention what imports have decreased, but since Spain consists of a lot of coastline, seaports could potentially begin to suffer as well.

3.  The article hinted that this problem arose from Spain trading with markets with poor economies. The  reason why this trade surplus is such a problem is the fact that imports have dropped 15%. Due to the economic crisis economic activity is already low, this surplus did not cause activity to rise. A resolution to this problem would be for Spain to take the Economy Ministry's advice and start trading in markets with a favorable economy. A policy that could improve this situation could be implementing a trade agreement with one of the country the Economy Ministry suggested or another country with a better economy.