EU current account surplus surges

The European Union generated a big quarterly increase in the surplus of its payments current account, official data showed on Friday, a positive sign amid signs of economic recovery.

The current balance of payments is an important indicator of the long-term ability of an economy to pay its way in the world, and so has an important bearing on currency values.

The 27-member European Union, the second-biggest economic entity in the world after the United States, achieved a surplus of 35.9 billion euros ($47.0 billion) in the second quarter of the year.

That was about six times greater than the surplus of 5.9 billion euros 12 months earlier, the data from the EU's Eurostat data agency showed.

The improvement in the balance of payments for goods was far greater, showing a surplus of 19.9 billion euros from a deficit of 10.6 billion euros.

This is a particularly critical factor, given that EU countries and particularly those hardest hit by debt problems, are working hard to ensure that their industries are competitive and to achieve a strong export performance.

However, the surplus on payments for services shrank slightly to 36.5 billion euros from 39.9 billion euros in the same period of last year.

A deficit on transfers of income shrank sharply, from a deficit of 9.1 billion euros to 5.7 billion euros.

Meanwhile a deficit on the account for current transfers was steady at 14.7 billion euros from 14.3 billion euros.

The data was not seasonally adjusted and could be revised.