The exorbitant increase of producer prices in Europe over the past two years and the recent strength of the common currency have seen the real effective exchange rate rise to an all-time high. This has pushed the relative trade competitiveness of Europe vs. Japan and China to new record lows. So, taking into account the currency and input prices, the industry in the Eurozone has never been as uncompetitive as it is right now compared to other export oriented economies.
