A quick note — I’ve seen several news reports in the past few days asserting that the structural problems of southern Europe have caused “chronic” trade deficits.

Like the notion that all of the troubled countries were fiscally irresponsible, this is a morality-play falsehood that keeps being stated as a fact by reporters who apparently don’t check the numbers.

Here’s the combined current account balance (trade balance broadly defined, including factor income) of the GIPS countries since 1990:

Those “chronic” large deficits are actually a relatively recent development; they emerged only after the false reassurance created by the euro caused huge flows from Germany to the periphery. By all means, let’s talk about structural reform — but don’t make the false claim that structural problems caused what is actually a macroeconomic problem.