Are France And Italy Suffering From Dutch Disease?

Conventional wisdom says that while southern Europe continues to struggle, core Eurozone countries have mostly recovered from the economic crisis and are now being hampered more by the instability caused by the periphery than by their own finances. Germany especially is rebounding strongly, but the perception that France is doing significantly better than its southern neighbors may be unfounded. Analysis from Natixis researcher Patrick Artus shows that both may be suffering from ‘Dutch disease,’ which would make a lasting recovery impossible.

Dutch Disease

Dutch disease, coined by The Economist in 1977 to describe the manufacturing slowdown in the Netherlands, normally refers to a situation where an influx of cash affects a country’s exchange rates, making exports less competitive...