German Speaking Europe Reports Huge GDP losses but Is the Crisis Letting Up?

Austria’s Weekly GDP Figures Point to Declining Losses as the Economy Adjusts, but the Losses Throughout German Speaking Europe Are Huge.

The Austrian National Bank has developed weekly measures of GDP, based on flash measures such as credit card transactions, truck border crossings, and electricity usage. These figures show a 25 percent decline in real GDP compared to the pre-crisis figures, with the low point reached end of March. The Swiss Economics Secretariat calculates a similar drop. German statistical authorities report a slightly smaller (15-20%) decline in economic activity. Notably, the Austrian weekly GDP figures show declining economic losses. By May 11, weekly GDP was some 11 percent below the previous year’s figure.

For charts, see https://www.nzz.ch/wirtschaft/coronavirus-und-die-wirtschaft-eine-bilanz-der-schaeden-ld.1557344

Swiss Try to Shut the Flood Gates for French Capital Flight

A well-informed colleague related to me that he had spoken with Swiss banking authorities trying to stem the flow of French capital into Switzerland. Wealthy French families have been spooked by the election of a socialist president threatening them with 75 percent tax rates. They cannot park their money inside the Euro zone; so they are flooding  Switzerland and England with capital flight.  The Swiss will likely impose a "parking fee" on incoming capital high enough to keep it within manageable proportions. If not, Swiss tourism and exports will be priced out of the market and the Swiss economy will take a nose dive. New York City realtors are also reporting French purchases of high end real estate.

Capital flight is the last thing France needs given its pressing borrowing constraints.

Dr. Gregory's latest book can be found at Amazon.com.