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H.-W. Sinn European Law and Life Culture 第四單元： The European Competitveness Crisis Lecturer: Hans-Werner Sinn, Ifo Institute for Economic Research Unless.

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Presentation on theme: "H.-W. Sinn European Law and Life Culture 第四單元： The European Competitveness Crisis Lecturer: Hans-Werner Sinn, Ifo Institute for Economic Research Unless."— Presentation transcript:

1 H.-W. Sinn European Law and Life Culture 第四單元： The European Competitveness Crisis Lecturer: Hans-Werner Sinn, Ifo Institute for Economic Research Unless noted, the course materials are licensed under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Taiwan (CC BY-NC-SA 3.0)Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Taiwan 1

2 H.-W. Sinn Bail-out measures Unemployment and growth Loss of competitiveness Development of trade balances Necessary and actual devaluation

3 H.-W. Sinn Unemployment and growth

4 H.-W. Sinn -4.8 -2.6 -2.1 -1.9 -0.8 -0.2 0.1 0.2 0.4 0.6 0.7 0.8 1.4 1.6 -06 -04 -02 -6 -4 -2 0 2 4 EU15 -0.3% % Source: Forecast by the Ifo Institute, June 2013. Real GDP inthe EU15 countries Economic growth 2013

5 H.-W. Sinn 2 6 10 14 18 22 26 % Quelle: Eurostat, August 2013. Unemployment rates in Europe Spain Greece Ireland Germany Portugal Italy France 2012 200120022003200420052006200720082009201020112013

6 H.-W. Sinn 2 6 10 14 18 22 26 % Quelle: Eurostat, August 2013. Unemployment rates in Europe 2012 200120022003200420052006200720082009201020112013 Germany Taiwan China Indonesia Japan

7 H.-W. Sinn 0 10 20 30 40 50 60 70 2001200220032004200520062007200820092010201120122013 Germany Ireland Spain France Italy Cyprus Portugal Greece % Japan Youth unemployment (< 25 years) Source: Eurostat.

8 H.-W. Sinn Loss of competitiveness

9 H.-W. Sinn 75 80 85 90 95 100 105 110 115 120 125 959697989900010203040506070809101112 Germany Greece Portugal Italy Public and private consumption % of NNI 11 Source: Eurostat

10 H.-W. Sinn Development of trade balances

11 H.-W. Sinn -300 -200 -100 0 100 200 9596979899000102030405060708091011 Source: Eurostat, Datastream. Current account balances Billion euros Germany GIPSIC 12 Source: Eurostat, September 2013. The euro tango!

12 H.-W. Sinn Are we already on the right track?

13 H.-W. Sinn 40000 50000 60000 70000 80000 90000 100000 110000 120000 130000 Mill. euros Imports Exports 20022003200420052006200720082009201020112012 Spain 2013 Source: Eurostat

14 H.-W. Sinn 6000 10000 14000 18000 22000 26000 Import Export 20022003200420052006200720082009201020112012 billion euros Greece 2013 Sourcle: Eurostat

15 H.-W. Sinn Necessary and actual devaluation

16 H.-W. Sinn 108 Slovenia 82 Slovakia 67 Greece 56 Spain 51 Cyprus 47 Portugal 47 Ireland 40 Italy 39 Luxembourg 37 Netherlands 26 Eurozone 25 Belgium 25 France 22 Finland 17 Austria 9 Germany Price development 1996-2008 % 020406080100 Source: Eurostat, calculations by the Ifo Institute. May 2013 Trade-weighted appreciation Trade-weighted appreciation vis-à-vis other euro countries: GIPSIC:+ 30% Germany:- 22%

17 H.-W. Sinn How much realignment has taken place and how much is necessary?

18 H.-W. Sinn Greece is 61% more expensive than Turkey, Portugal is 43% more expensive. Devaluation required: 38% and 30% respectively

19 H.-W. Sinn 60 80 100 120 140 95 969798990001020304050607080910111213 Greece Italy Ireland Portugal Spain France Germany Q3/2008=100 Real exchange rates (GDP deflator relative to rest of euro area) & necessary realignment after Goldman Sachs Long run target Italy Lehman 5,5% inflation? 71% price increase? 42% asset loss? Why Ireland? Source: Eurostat

20 H.-W. Sinn Bail-out measures

21 H.-W. Sinn Help from the printing press

22 H.-W. Sinn ECB collateral requirements Date Standard Until 24 October 2008A- From 25 October 2008BBB- 3 May 2010 – 7 July 2011Rating requirement waived for government bonds of Greece, Ireland and Portugal ELA credit Non-traded ABS created by commercial banks Company credit The printing press was underbidding the capital market.

23 H.-W. Sinn Billion euros Finland, Germany, Luxembourg, and the Netherlands (left-hand scale) GIPSIC (right-hand scale) Billion euros Note: Germany, the Netherlands, Italy and Spain: end of May; other countries: end of April. -200 0 +200 +400 +1200 +600 +1000 +800-800 -400 -200 0 +200 -600 -1000 -1200 May 2013 +808 bn May 2013 -717 bn 20032004200520062007200820092010201120122013 Target balances claims and liabilities Source: Eurostat

24 H.-W. Sinn 699 46 66 118 214 58 41 1156 772 384 Target liabilities** (GIPSIC) Purchases of GIPSIC government bonds by the central banks of the other euro countries* Greece (euro countries, EFSF, IMF) Ireland (EFSM, EFSF, IMF) Portugal (EFSM, EFSF, IMF) Claims related to the under-proportionate issuance of banknotes (June 2013) (67%) ECB (33%) Parliaments Spain (ESM) Lending funds to euro countries (Billion euros) Paid-out to date * Data updated: 27 September 2013 ** Data as of end of June April 2013 (Greece, Ireland, Portugal and Cyprus); Spain and Italy: end of August. 5 Cyprus (ESM)

25 H.-W. Sinn The EZB is predetermining policy and curbing reform.

26 H.-W. Sinn 2. Target The euro trap 3. Government bond purchases by ECB 6. Banking union 4. EFSF/ESM 1. Credit bubble 5. OMT

27 H.-W. Sinn Three options 1. Deflation in the periphery 3. Exit 2. Inflation in the core Violation of the central bank’s mandate Mass unemployment Bank Run à la Cyprus

28 H.-W. Sinn Potential international financial aid Greece (185% of 2012 GDP) Spain Italy 358 bn. euro 4.838 bn. euro 1.941 bn. euro 2.897 bn. euro

29 H.-W. Sinn Conclusions 1. Financial crisis is only the tip of the iceberg 4. The likelihood of exits by large countries is growing 2. Overpriced economies must devalue 3. Germany must inflate

30 H.-W. Sinn 頁碼作品 版權 圖示 來源 / 作者 1-35 Wikimedia commons / Blurpeace, Sreejithk2000 http://commons.wikimedia.org/wiki/File:Ifo_logo.svg http://commons.wikimedia.org/wiki/File:Ifo_logo.svg 本作品屬公共領域之著作。瀏覽日期： 2013/10/04 。 4 Ifo institute 依據著作權法第 46 、 50 、 50 、 52 、 65 條合理使用。 5 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_m&lang=en 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/10/04 。 6 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_m&lang=en 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/10/04 。 版權聲明 32

31 H.-W. Sinn 頁碼作品 版權 圖示 來源 / 作者 7 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=une_rt_m&lang=en (age<25) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/10/04 。 9 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_fcs_k&lang=en (TIME:1995-2012) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/07 。 11 Eurostat http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00 038&plugin=1 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/10/05 。 13 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=namq_exi_c&lang=en (TIME:2002Q1-2013Q2,, INDIC_NA: Exports of goods and services & Imports of goods and services, Spain) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/07 。 33

32 H.-W. Sinn 頁碼作品 版權 圖示 來源 / 作者 14 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=namq_exi_c&lang=en (TIME:2002Q1-2013Q2,, INDIC_NA: Exports of goods and services & Imports of goods and services, Greece) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/07 。 16 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=prc_hicp_midx96&lang=en (TIME:2008) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/07 。 19 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ert_eff_ic_q&lang=en (TIME:1995Q1-2013Q2) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/07 。 23 Eurostat http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=bop_q_c&lang=en (Partner: Euro area, p.s. GIPSIC 是 Greece, Ireland, Portugal, Cyprus, Spain and Italy) 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/08 。 24 Ifo Institute http://www.cesifo-group.de/ifoHome/policy/Haftungspegel.html 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/11/08 。 34

33 H.-W. Sinn 頁碼作品 版權 圖示 來源 / 作者 28 Wikimedia commons / Lars Aronsson http://commons.wikimedia.org/wiki/File:La2-euro.jpg 本作品以創用 CC 「相同方式分享」 1.0 版授權釋作。瀏覽日期： 2013/10/06 。創用 CC 「相同方式分享」 1.0 版 28 Wikimedia commons / unknown http://commons.wikimedia.org/wiki/File:AVA_Aandeel_1000_Gulden_1875.jpg 本作品屬公共領域之著作。瀏覽日期： 2013/10/06 。 28 Hanser Verlag / Hans-Werner Sinn 著， 2012 ，《 Die Target-Falle – Gefahren für unser Geld und unsere Kinder 》， Germany ： Hanser Verlag 。 http://www.hanser-literaturverlage.de/buecher/buch.html?isbn=978-3-446-43353-3 依據著作權法第 46 、 50 、 52 、 65 條合理使用。瀏覽日期： 2013/10/06 。

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