Still Cheerful

European nations, well aware of the old saw that when the U.S. sneezes the world catches pneumonia, have been anxiously taking their economic temperatures. While inflation has been checked in most countries, there have been only a few scattered sniffles so far. One big reason: U.S. imports have remained high, chiefly because of an increasing demand for small European cars, while exports have dropped. If the U.S. recession ends this year, European businessmen feel that they will not be affected, just as they were not affected by the 1953-54 drop. Items: P:Britain's exports are booming (cars were a record 14,000 in January), and the ratio of import to export prices is the best since the Korean war. While the prices of the raw materials Britain needs have tumbled, the prices of finished goods have not. The pound has become so strong that the government last week lifted restrictions on pound notes: any amount may be brought into Britain, instead of the previous -L-10 limit. Unemployment has risen but is only 1.9% of the labor force, not enough to bring a shift in the government's tight credit policy. P:Italy's gross national product increased more than 5% last year, is expected to continue to climb; though the industrial production index in January was down seasonally from December, it still topped January 1957. Housing starts were down, but Italian leaders feel that the U.S. will halt its recession, avoid any effect on the Italian economy.

P:Germany's production in January was up 5.1% over a year ago, and gross sales up more than 14%. But both production and exports were down from December, although much of the drop was seasonal. Unemployment is up slightly (to 1,432,000). The building industry, crimped by tight money, accounted for 70% of the jobless rise. Prices are easing in the textile, clothing and construction industries, but most German economists expect prices and wages to remain steady. P:France, traditionally slow to react to economic fluctuations in the rest of the world, is still fighting inflation. While production is increasing at a rate of 9% annually, prices are still rising. Biggest concern: the government's battle to keep the budget deficit manageable. P:The Benelux countries are in a mild recession. Belgians are worried about high coal stocks and low commodity prices. Dutch agricultural exports are lagging, but overall exports continue to rise 3% a year. Money rates in all the Benelux nations have been dropping. While there is some regional unemployment, Beneluxers are most concerned over the possibility of increasing U.S. competition in export markets.

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