IHS Chemical Week


Not So Stimulating?

2:01 PM MST | March 5, 2009 | By VINCENT VALK

Everyone – internet scammers included – seems to want a piece of the stimulus pie. But how large that pie is depends on where you’re eating it.

With the US chemicals industry hoping to see an upturn in demand due to new stimulus-related construction (it’s even got a logo!), our counterparts in Europe may find themselves less, well, stimulated. The U.N.’s International Labor Organization has been keeping tabs on international stimulus spending and, with the notable exception of Spain – whose stimulus package, at 8.1% of GDP, is the largest in the world – the Euro zone is the big laggard. The UK and France, for example, each have stimulus packages that total around 1% of GDP. Germany’s, at 1.6% of GDP, is scarcely more, and far below the international average of 3.16%. Several European countries, including Austria, Denmark, and Ireland, have not passed any stimulus at all.

Outside Spain, the largest stimulus package is, unsurprisingly, that of China, at 6.9% of GDP. China is also the only country that I know of – and correct me if I’m wrong – that has passed a stimulus measure specifically targeted at the chemicals sector. The next-largest package is none other than that of the United States, which, though its been criticized (rightly so, in the opinion of this writer) for being too small, clocks in at 5.5% of GDP.

Considering that the E.U. is, by some measures, the world’s largest economy, its member nations have been called out for not pulling their weight. I’d tend to agree – if the E.U. wants to be a player in trade negotiations and have a global currency, it can’t just piggyback on the U.S. and China when things go south.

Do you agree or disagree? Do you think the entire notion of fiscal stimulus is a giant socialist boondoggle that will saddle future generations with unending mountains of debt? Are you peeved that the chemical industry hasn’t seen much cash? Let us know in the comments.

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