To: Snowshoe who wrote (64985 ) 7/31/2010 3:12:41 AM From: elmatador 1 Recommendation Respond to of 217781 Remittances to countries outside the EU–which make up about 70% of the total–shrank by 1 billion euros last year to 21.5 billion euros, after nearly doubling between 2004 and 2008. Remittances to other EU countries fell even more sharply. Remittances From Europe Sink Amid Recession By Brian Blackstone The 2008/2009 recession took a big bite out of a vital source of cash for some countries: worker remittances from Europe. According to a Eurostat report, remittance outflows–which come mainly via migrant workers from outside of the EU who send money home–fell in 2009 after growing steadily since 2004. Remittances to countries outside the EU–which make up about 70% of the total–shrank by 1 billion euros last year to 21.5 billion euros, after nearly doubling between 2004 and 2008. Remittances to other EU countries fell even more sharply. Much of the decline appears attributable to Spain, the largest sender of remittances to non-EU countries. Spain’s booming construction industry last decade drew in vast amounts of immigrant workers. But in the wake of the housing collapse, Spain’s jobless rate has soared to nearly 20%. Total remittance outflows from Spain fell nearly 10% last year, to 7.1 billion euros. Eurostat didn’t have a breakdown between intra-EU and extra-EU flows, but the pattern from prior years suggests a good chunk of the decline came from remittances to outside of Europe. Some of the largest beneficiaries of those funds from Spain include Colombia, Ecuador and Bolivia. Workers in Italy tend to send parts of their their paychecks to China, Philippines and Romania. German remittances go mostly to Turkey and Italy. Though most countries in Europe have net outflows of remittances, they’re a big source of financing for countries in Eastern Europe like Romania, Poland and Bulgaria and, within the euro zone, for Portugal. According to Eurostat, current account deficits in Poland and Romania would have been over 50% higher in 2009 were in not for worker remittances. Romania took the biggest hit last year, with remittance inflows down more than 2 billion euros to 3 billion euros. The good news for those countries and others that rely on an inflow of cash from other countries is that recent declines may be starting to reverse now that Europe is growing again. “The quarterly data on remittances show that the negative trend in overall remittances that began at the end of 2007 was over by the second half of 2009 in most EU countries,” according to Eurostat.blogs.wsj.com