The Debt Crisis and the World Economy Nick Kounis Head Macro Research Athens, 17 October 2012 Marine Money Greek Forum

2 Global PMI index Source: ABN AMRO Group Economics Introducing the Stop-Go Recovery

3 Euro crisis has been the main culprit S

4 Foreign holdings of Spanish and Italian government debt, share in total, % Source: National central banks Foreign investors running for the exit!

55 ECB President Draghi to the rescue “The ECB is ready to do whatever it takes …believe me it will be enough”

6 The Draghi effect: bond markets 2-Y government bond yield spread over Germany, % Source: Thomson Reuters Datastream

77 Spanish PM Rajoy: I’m still thinking about it!

88 Big systemic risks to the euro have been reduced Source: EBA, ABN AMRO Group Economics Eurozone big bank exposure to sovereign debt (% tier 1 capital)

9 The Draghi effect: equity markets Index Source: Thomson Reuters Datastream

10 Signs of bottoming out in global industrial cycle, but… % yoy Source: Website Fraport, Thomson Reuters Datastream

11 Fixing the euro will take time

12 Budget cuts, joblessness will weigh on eurozone growth 3% GDP cuts in Unemployment: 11.3%

13 Muddling through remains main scenario for euro

14 China’s economic growth slowing down… % Source: Thomson Reuters Datastream

15 …policymakers responding cautiously % Source: Thomson Reuters Datastream

16 China’s great transformation

17 Fed Chairman Bernanke has taken a bold step USD 85bn a month !!

18 Impact of QE: equities Index Source: Thomson Reuters Datastream, ABN AMRO GE QE-1 QE-2 QE-3Twist

19 Impact of QE: commodities Index Source: Thomson Reuters Datastream, ABN AMRO GE QE-1QE-2 TwistQE-3

20 The debt crisis across the Atlantic: the US fiscal cliff

21 Global Economic Forecasts Source: ABN AMRO GE

22 Commodity Price Forecasts Source: ABN AMRO GE

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