BRUSSELS Feb 6 Forget about statistics for
employment and industrial production, it is being claimed that
the price of a hamburger is showing where Europe's economic
reforms are working - and where they are not.
By studying the different prices for McDonald's Big
Mac burger throughout the euro zone between July 2011 and
January 2013, Guntram Wolff, an economist at think-tank Bruegel,
found evidence that struggling countries like Ireland had
tightened their belts and others had not.
The price of a Big Mac has been used by The Economist for
decades as a partially tongue-in-cheek way of judging global
currency valuations - the gist being that it costs the same to
make but is charged at different prices around the world.
Wolff took the data and found that the price rise in Greece,
Portugal and Spain has been less than the euro zone average,
while in Ireland the price actually fell. These are the main
countries undergoing deep economic reform due to the debt
This contrasts with price rises above the euro zone burger
average in Germany.
Wolff concludes from this that economic adjustment is
working. For example, In Ireland, which has made spending cuts
after receiving international aid, the burger price has fallen
from 3.80 euros to less than 3.50 euros.
There is one notable exception, however. Heavily-indebted
Italy is the most expensive country in the euro area to buy a
Big Mac - 3.85 euros - while it costs just 3.64 euros in
"Italy," said Wolff, "needs to apply the right policies to
address high inflation."