präsentation heiner flassbeck
DESCRIPTION
AGORA Economic Conference 4th Athens Biennale 2013 12/10/13TRANSCRIPT
Professor Dr. Heiner Flassbeckflassbeck-economics.de
Athens, October 2013
The systemic crisis of the Euro – true causes and effective therapies
2flassbeck-economics.de
ULC1) growth rates and inflation for EMU2)
The crucial relationship
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) ULC defined as gross income per capita in ECU/Euro of dependent employees divided by real GDP per total employed persons2) 12 countries: Belgium, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, SpainSource: AMECO database (as per Nov-12); own calculations
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
ULC growth Inflation
3flassbeck-economics.de
Nominal wages1) and nominal productivity2)
France and Germany: No real Problem
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Defined as total nominal compensation of dependent employees divided by working hours of dependent employees times number of dependent employees. 2) Defined as nominal GDP divided by working hours of total employed persons times number of employed persons. 3) 2012 values for working hours of total employees and dependent employees projected based on data from Destatis and AMECOSource: AMECO database (as per Nov-12); Eurostat; own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
15
20
25
30
35
40
45
50
55France
Euro
per
hou
r
Δ €17,1
Δ €11,6
3
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
15
20
25
30
35
40
45
50
55Germany
Euro
per
hou
r
Δ €10,6
Δ €14,9
3
1525354555
1999
Euro
per
hou
r
Nominal wages Nominal productivity
4flassbeck-economics.de
Real wages per hour1) and productivity2) (1999 = 100)France got it right
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Total real compensation of dependent employees divided by working hours of dependent employees times number of dependent employees. 2) Real GDP divided by working hours of total employed persons times number of employed persons. 3) Total nominal compensation of dependent employees is price adjusted by a constant inflation rate of 1.9%, apart from that same calculation as for 1)Source: AMECO database (as per Nov-12); OECD database (as per Apr-13); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
95
100
105
110
115
120Germany
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
95
100
105
110
115
120France
9095100105110115120 1999
2006
Real wages per hour Fictitious real wages Productivity3
5flassbeck-economics.de
ULC in Germany, France and Southern Europe1) (1999 = 100)Under- and overshooting: who is to blame?
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Spain, Italy, Greece and PortugalSource: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
90
95
100
105
110
115
120
125
130
135
ULC Germany ULC France ULC Southern Europe Inflation target of 1.9%
6flassbeck-economics.de
Growing trade imbalances mark the beginning of EMU – Current account balances in percent of GDP
Historically unique trade imbalances
Luxembourg - Bruxelles, 26./27.06.2013
Note: Negative values represent a current account deficitSource: AMECO database (as per Nov-12); own calculations
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Germany FranceSouthern Europe (Greece, Portugal, Spain and Italy)
Introduction of the Euro
7flassbeck-economics.de
ULC from 1999 to 2012 for selected EMU countries (1999 = 100)Adjustment by some
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
90
95
100
105
110
115
120
125
130
135
140
Germany Greece Spain France Italy Inflation target of 1.9%
8flassbeck-economics.de
ULC and real GDP – France (1999 = 100)Recession without adjustment
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
105
110
115
120
125
130
135
140
ULC Real GDP
9flassbeck-economics.de
ULC and real GDP - Italy (1999 = 100)Deep recession without adjustment
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
105
110
115
120
125
130
135
140
ULC Real GDP
10flassbeck-economics.de
ULC and real GDP - Portugal (1999 = 100)More adjustment and more recession
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
105
110
115
120
125
130
135
140
ULC Real GDP
11flassbeck-economics.de
ULC and real GDP - Spain (1999 = 100)Depression and adjustment
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
105
110
115
120
125
130
135
140
ULC Real GDP
12flassbeck-economics.de
ULC and real GDP - Greece (1999 = 100)The „best“ performer and a great disaster
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
105
110
115
120
125
130
135
140
ULC Real GDP
13flassbeck-economics.de
A scenario for convergence of ULC (1999 = 100)The only way out
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
90
100
110
120
130
140
150
Germany FranceSouthern Europe (Greece, Portugal, Spain and Italy)
Fictitious development
+3% (= nominal wages of about +4.7%)
+1.3% (=nominal wages of about +2.3%)
+1% (= nominal wages between 1% and 2%)
14flassbeck-economics.de
Net financial flows1) in Germany2)
The German contradiction
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Net debt position of a business sector in relation to gross national product; moving 3-year averages. 2) Western Germany until 1991; Germany starting 1991Source: German Federal Ministry of Finance; AMECO database (as per May-11); own calculations
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
-10
-8
-6
-4
-2
0
2
4
6
8
10
-200
20 1…
Private households Corporations Government Foreign countries
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-10
-8
-6
-4
-2
0
2
4
6
8
10
15flassbeck-economics.de
Nominal 10YR bond yieldsTitel
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculation
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0%
5%
10%
15%
20%
25%
30%
Germany France Italy Belgium Greece Spain Portugal
16flassbeck-economics.de
Real 10YR bond yields1)
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Real bond yields equal nominal bond yields minus GDP inflation rateSource: AMECO database (as per Nov-12); own calculations
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
Germany France Italy Belgium
17flassbeck-economics.de
ULC and real GDP - Ireland (1999 = 100)Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
100
110
120
130
140
150
160
ULC Real GDP
18flassbeck-economics.de
Core country bank lending to periphery – Gross claimsCore1)-periphery2) ($m)
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Germany, Netherlands and France. 2) Spain, Portugal, Greece and Ireland.Source: BIS; own calculations
2006
-Q4
2007
-Q1
2007
-Q2
2007
-Q3
2007
-Q4
2008
-Q1
2008
-Q2
2008
-Q3
2008
-Q4
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q2
2010
-Q3
2010
-Q4
2011
-Q1
2011
-Q2
2011
-Q3
2011
-Q4
2012
-Q1
2012
-Q2
2012
-Q3
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
19flassbeck-economics.de
ECB liquidity provision1) by instrument (€m)Titel
Luxembourg - Bruxelles, 26./27.06.2013
Notes: 1) Refers only to liquidity provision by the ECB (no absorption)Source: ECB; own calculations
2007
-Q1
2007
-Q1
2007
-Q2
2007
-Q3
2007
-Q3
2007
-Q4
2008
-Q1
2008
-Q1
2008
-Q2
2008
-Q3
2008
-Q3
2008
-Q4
2009
-Q1
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q1
2010
-Q2
2010
-Q3
2010
-Q3
2010
-Q4
2011
-Q1
2011
-Q1
2011
-Q2
2011
-Q3
2011
-Q3
2011
-Q4
2012
-Q1
2012
-Q1
2012
-Q2
2012
-Q3
2012
-Q3
2012
-Q4
2013
-Q1
2013
-Q1
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Main refinancing operations Longer-term refinancing operationsMarginal lending facility Other liquidity providing operations
20flassbeck-economics.de
Reserve Maintenance for EMU banks (€m)Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: ECB; own calculations
2009
-Q1
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q1
2010
-Q2
2010
-Q3
2010
-Q3
2010
-Q4
2011
-Q1
2011
-Q1
2011
-Q2
2011
-Q3
2011
-Q3
2011
-Q4
2012
-Q1
2012
-Q1
2012
-Q2
2012
-Q3
2012
-Q3
2012
-Q4
2013
-Q1
2013
-Q1
-100,000
0
100,000
200,000
300,000
400,000
500,000
Required reserves Excess reserves Deficiencies
21flassbeck-economics.de
Government securities held by banks to total assetsTitel
Luxembourg - Bruxelles, 26./27.06.2013
Source: ECB; own calculations
2007
-Q1
2007
-Q1
2007
-Q2
2007
-Q3
2007
-Q3
2007
-Q4
2008
-Q1
2008
-Q1
2008
-Q2
2008
-Q3
2008
-Q3
2008
-Q4
2009
-Q1
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q1
2010
-Q2
2010
-Q3
2010
-Q3
2010
-Q4
2011
-Q1
2011
-Q1
2011
-Q2
2011
-Q3
2011
-Q3
2011
-Q4
2012
-Q1
2012
-Q1
2012
-Q2
2012
-Q3
2012
-Q3
2012
-Q4
2013
-Q1
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
22flassbeck-economics.de
Holdings of sovereign bonds by domestic banks and non-residents as percent of total MFI assets – Greece
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: Brueghel database of sovereign bond holdings developed in Merler and Pisani-Ferry (2012)
1997
-Q4
1998
-Q2
1998
-Q4
1999
-Q2
1999
-Q4
2000
-Q2
2000
-Q4
2001
-Q2
2001
-Q4
2002
-Q2
2002
-Q4
2003
-Q2
2003
-Q4
2004
-Q2
2004
-Q4
2005
-Q2
2005
-Q4
2006
-Q2
2006
-Q4
2007
-Q2
2007
-Q4
2008
-Q2
2008
-Q4
2009
-Q2
2009
-Q4
2010
-Q2
2010
-Q4
2011
-Q2
2011
-Q4
2012
-Q2
0%
10%
20%
30%
40%
50%
60%
70%
80%
Resident banks Non-residents
23flassbeck-economics.de
Holdings of sovereign bonds by domestic banks and non-residents as percent of total MFI assets – Portugal
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: Brueghel database of sovereign bond holdings developed in Merler and Pisani-Ferry (2012)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Resident banks Non-residents
24flassbeck-economics.de
Holdings of sovereign bonds by domestic banks and non-residents as percent of total MFI assets – Spain
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: Brueghel database of sovereign bond holdings developed in Merler and Pisani-Ferry (2012)
1997
-Q4
1998
-Q2
1998
-Q4
1999
-Q2
1999
-Q4
2000
-Q2
2000
-Q4
2001
-Q2
2001
-Q4
2002
-Q2
2002
-Q4
2003
-Q2
2003
-Q4
2004
-Q2
2004
-Q4
2005
-Q2
2005
-Q4
2006
-Q2
2006
-Q4
2007
-Q2
2007
-Q4
2008
-Q2
2008
-Q4
2009
-Q2
2009
-Q4
2010
-Q2
2010
-Q4
2011
-Q2
2011
-Q4
2012
-Q2
0%
10%
20%
30%
40%
50%
60%
Resident banks Non-residents
25flassbeck-economics.de
Holdings of sovereign bonds by domestic banks and non-residents as percent of total MFI assets – Ireland
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: Brueghel database of sovereign bond holdings developed in Merler and Pisani-Ferry (2012)
2001
-Q3
2001
-Q4
2002
-Q1
2002
-Q2
2002
-Q3
2002
-Q4
2003
-Q1
2003
-Q2
2003
-Q3
2003
-Q4
2004
-Q1
2004
-Q2
2004
-Q3
2004
-Q4
2005
-Q1
2005
-Q2
2005
-Q3
2005
-Q4
2006
-Q1
2006
-Q2
2006
-Q3
2006
-Q4
2007
-Q1
2007
-Q2
2007
-Q3
2007
-Q4
2008
-Q1
2008
-Q2
2008
-Q3
2008
-Q4
2009
-Q1
2009
-Q2
2009
-Q3
2009
-Q4
2010
-Q1
2010
-Q2
2010
-Q3
2010
-Q4
2011
-Q1
2011
-Q2
2011
-Q3
2011
-Q4
2012
-Q1
2012
-Q2
2012
-Q3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Resident banks Non-residents
26flassbeck-economics.de
Holdings of sovereign bonds by domestic banks and non-residents as percent of total MFI assets – Italy
Titel
Luxembourg - Bruxelles, 26./27.06.2013
Source: Brueghel database of sovereign bond holdings developed in Merler and Pisani-Ferry (2012)
1997
-Q4
1998
-Q2
1998
-Q4
1999
-Q2
1999
-Q4
2000
-Q2
2000
-Q4
2001
-Q2
2001
-Q4
2002
-Q2
2002
-Q4
2003
-Q2
2003
-Q4
2004
-Q2
2004
-Q4
2005
-Q2
2005
-Q4
2006
-Q2
2006
-Q4
2007
-Q2
2007
-Q4
2008
-Q2
2008
-Q4
2009
-Q2
2009
-Q4
2010
-Q2
2010
-Q4
2011
-Q2
2011
-Q4
2012
-Q2
0%
10%
20%
30%
40%
50%
60%
Resident banks Non-residents
27flassbeck-economics.de
Adjustment of ULC growth rates over thirty yearsTitel
Luxembourg - Bruxelles, 26./27.06.2013
Source: AMECO database (as per Nov-12); own calculations
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-5%
0%
5%
10%
15%
20%
25%
Germany Italy France Inflation target of 1.9%