Your example now clearly tells me the source of my confusion. It has to do with the use of "double indices". Taking your lead, I designed a different chart that brings out the story more clearly. Look at my post here:

http://junkcharts.typepad.com/junk_charts/2005/08/relative_relati.html

If you have the data series from eurostat, it would be nice to see the economist chart plotted in this new design, with Britain added in!