Shrinking but surviving

In Belgium this year, “€63.17bn will change hands in the black economy,” reports De Morgen. The Brussels daily reports that according to a study conducted in 31 European countries by the Johannes Kepler University in Linz, Austria, the Belgian shadow economy represents 16.4 per cent of total economic activity of the country. That is the lowest level in 10 years, but still the highest of all West European countries: in Germany the rate is 13 per cent, while it is 9.9 per cent in France and 9.1 per cent in The Netherlands.

The average size of the European black economy is 18.5 per cent of GDP, a decrease from 22.3 per cent in 2003, notes De Morgen, adding that eastern Europe is the area that rates the worst in Europe.

Despite the strong growth of the economy, the black market there is still big, with peaks above 30 per cent in Bulgaria. Still, there is some improvement. In southern Europe that is no longer the case. The push back of the informal economy has stagnated. Countries like Portugal, Spain and Italy have a black economy of around 20 per cent of the official one. In Greece that number goes up to 25.4 per cent. For the entire European Union the shadow economy is estimated at €2.1trn.

One solution would be to “discourage the use of cash,” the newspaper writes:

For real estate transactions – even for advances – paying in cash will soon be forbidden. It would be logical to expand this to sectors such as the art trade and the buying and selling of second hand cars and jewellery.