1. A2 Economics PowerPoint Briefings 2009 Euro Area in Charts tutor2u ™ tutor2u ™

2. tutor2u ™ tutor2u ™ Key Issues Which countries have joined the Euro Zone? Why have convergence criteria? What are the basic effects of a single currency? What are the motivations for joining the Euro? The case for UK entry The case against UK entry Optimal currency areas Recent macroeconomic performance of the Euro Zone area Tensions for the single currency in 2009-2010

3. tutor2u ™ tutor2u ™ Euro Zone Interest Rates

4. tutor2u ™ tutor2u ™ Euro Area macroeconomics Steady growth since 1996 came to an end in 2008 when the Euro Area moved into recession There have been sizeable differences in macroeconomic outcomes within the Euro Area Almost inevitable given the structural differences in the sixteen economies that now have the Euro Tensions are rising as growth falters, unemployment rises and individual countries struggle to come to terms with the global credit crunch

5. tutor2u ™ tutor2u ™ An overview for the Euro Area Euro area OECD countries Real GDP (% change)1.91.83.02.61.0 - 0.61.6 Consumer spending (% change)1.51.82.01.60.40.21.2 Gross investment (% change)1.83.45.84.10.4 - 4.41.8 Unemployment (% of labour force)8.8 8.27.4 8.68.2 Budget balance (% of GDP) - 3.0 - 2.5 - 1.3 - 0.6 - 1.4 - 2.2-1.8 Short term interest rate (%)2.12.23.14.34.72.73.2 Consumer price inflation (%)2.2 2.13.41.42.2

6. tutor2u ™ tutor2u ™ Real GDP Growth

7. tutor2u ™ tutor2u ™ Consumer price indices for selected countries

8. tutor2u ™ tutor2u ™ Economic cycles

9. tutor2u ™ tutor2u ™ CPI Inflation for the Euro Area

10. tutor2u ™ tutor2u ™ Inflation-Unemployment record

11. tutor2u ™ tutor2u ™ Inflation divergence

12. tutor2u ™ tutor2u ™ Manufacturing recession

13. tutor2u ™ tutor2u ™ Unemployment rates compared

14. tutor2u ™ tutor2u ™ Progress in reducing the NAIRU

15. tutor2u ™ tutor2u ™ Euro Dollar Exchange Rate

16. tutor2u ™ tutor2u ™ Germany 200420052006200720082009Average pa 04-09 Real GDP (% change)0.70.93.22.61.4-0.81.3 Consumer spending (% change)-0.20.21.2-0.3-0.60.20.1 Gross investment (% change)-1.31.38.54.53.6-2.82.3 Unemployment (% of labour force)9.710.59.88.37.48.19.0 Budget balance (% of GDP)-3.8-3.3-1.50.10.0-0.9-1.6 Short term interest rate (%)2.12.23.14.34.72.73.2 Consumer price inflation (%)1.81.91.82.32.91.12.0

17. tutor2u ™ tutor2u ™ Spain 200420052006200720082009 Real GDP (% change)3.33.63.93.71.3-0.92.5 Consumer spending (% change)4.2 3.93.51.2-0.42.8 Gross investment (% change)5.17.07.15.3-2.0-9.22.2 Unemployment (% of labour force)10.59.28.58.310.914.210.3 Budget balance (% of GDP)-0.41.02.02.2-1.5-2.90.1 Short term interest rate (%)2.12.23.14.34.72.73.2 Consumer price inflation (%)3.13.43.62.84.41.83.2

18. tutor2u ™ tutor2u ™ Spanish Boom comes to an end

19. tutor2u ™ tutor2u ™ Ireland 200420052006200720082009 Real GDP (% change)4.76.45.76.0-1.8-1.73.2 Consumer spending (% change)3.77.27.06.0-0.50.44.0 Gross investment (% change)6.312.33.81.3-22.7-23.8-3.8 Unemployment (% of labour force)4.54.34.44.65.97.75.2 Budget balance (% of GDP)1.41.73.00.2-5.6-7.1-1.1 Short term interest rate (%)2.12.23.14.34.72.73.2 Consumer price inflation (%)2.32.22.72.93.10.92.3

20. tutor2u ™ tutor2u ™ German growth and exports

21. tutor2u ™ tutor2u ™ German inflation