With the euro rising, it is not surprising to see the EMU area’s trade surplus erode. But the sharpness in the July erosion and the spurt in imports is good news that makes that erosion look more like it is due to a rekindling for growth than to a loss in competitiveness. This report is not a clear sign of export prospects. Retail data from Germany on export orders and on industrial output has showed some weakening. The export picture does not revive those fears nor does it ease them. To be sure the German wise-man Bofinger already has been talking of the prospect of using foreign exchange intervention - a clear sign that someone is getting hurt by the strong euro. But this month’s EMU trade erosion looks more like it is due to the good news of improved growth as the balance erosion is mostly due to the spurt in imports. With the dangers of financial contagion lurking, this report is somewhat reassuring. That, of course, does not mean that the ECB will no longer be under pressure or that Sarkozy will stop complaining about ECB policy. But an economy on stronger footing will make the ECB’s decisions somewhat easier if this hint of strength proves to be lasting.