Indicator: Goods, services and capital Balance Index

Within the balance dimension the primary indicator is the balance index, defined as the ratio between the difference in inflow-outflow and the maximum value of inflow or outflow. The index takes values from -1 to 1, where -1 means outflow only, 0 means perfectly balanced flow, and 1 means inflow only.
In the case of goods/trade and goods/freight it should be noted that the indicator intuitively shows oppo-site values than is traditional for trade, where the balance usually means export minus import, i.e. out-flow-inflow. The goods/services/capital basket is very diverse for the balance dimension. There is some correlation between goods freight and services. In both cases, the picture of the relationship be-tween inflow and outflow is similar for many regions in Europe, e.g. southern Germany and northern Italy. However, this is not a rule. In Finland, for example, there is a contrast between the strong correla-tion between goods trade and good freight and the rather different, very positive balance sheet on the services side. On the other hand, the balance in FDI capital is clearly negative for all Central and Eastern European countries (EU enlargement 2004-2013), but also for most regions of the Iberian Peninsula and Finland. At the same time, a clearly positive FDI balance is found in most German, Swiss, Danish, and British regions.
The results of the synthetic matrix for the goods/services/capital basket are a derivative of the results in four flows belonging to the basket. There are few regions where inflow or outflow clearly dominates. Inflow is characteristic for East England, Switzerland, and Luxembourg. On the other hand, a strong outflow occurs in Scotland and Latvia. Most countries are dominated by a spatial mosaic of adjacent inflow and utflow regions. In some countries there are internal differences. Inflow is higher in the west-ern parts of both Germany and Poland. The eastern Länder and the provinces of eastern Poland are characterised by a negative balance. Furthermore, in the peripheral countries of southern and Central-Eastern Europe the capital cities tend to have a strongly negative balance. This is the case of Madrid, Athens, Warsaw, and Bucharest. The same cities mostly have an inflow surplus in trade and services linkages. However, this is more than compensated for in FDI flows (strongly negative balance).