European Exports decline as a result of reduced competitiveness

A rising euro is hard on exporters who must compete on an international playing field, which causes products and services to be more expensive to overseas buyers and importers.

In the first quarter, foreign exchange markets were volatile as the euro was trading in a range between $1.45 and high $1.50s.

In the past year, the euro has gained 15 percent against the dollar in making products from the euro zone less competitive to the US, Asian and British markets.

Rising raw material cost have had a huge impact as Rhodia SA, France’s biggest specialty-chemicals maker, saw first-quarter profits fall 29 percent.

The strength of the euro has inflicted on European profits, as the euro is still more than 6 percent higher than the dollar since January.

Imports remained unchanged in March, giving the euro region a trade deficit of 2.4 billion euros, although the exports reduced by 2.9 percent from February.

Exports from the largest most economically stable country, Germany, have declined 1 percent in March, while France was the hardest hit with a reduction of 2.8 percent.

However, it was not all doom and gloom for the euro zone as exports to China jumped 21 percent, while those to Poland increased 24, with the greatest increase experienced with business to Russia which increased 28 percent.

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