Examining official statistics released by European authorities, Ward highlighted “a widening core/periphery divergence”, with capital fleeing Greece, Portugal, Ireland, Spain and Italy.
“M1” money supply – meaning cash in circulation and in bank accounts – is declining at an accelerating rate in the periphery, the numbers show.
Although M1 money supply is little changed over the last six months on a regional basis (down 0.3 per cent), individuals have been pulling their money out of the edges of the Eurozone and depositing it in the region’s less indebted countries.
M1 deposits have dropped by 4.2 per cent over the last six months in the periphery, with the capital flight worst in Greece (20.7 per cent), Portugal (16.3 per cent) and Ireland (11.8 per cent).
By contrast, Germany, France and surrounding countries have seen M1 money supply rise by 2.1 per cent over the same period.
The periphery “economies remain locked on course for a depression barring radical ECB action”, says Ward.