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Transcript
The Eurozone
October 2012
Baron Frankal
Director of Strategy
New Economy
RECENT ECONOMIC CONTEXT
UK double dip recession, as global economy stalls…
…and outturn worse than BoE forecasts from May 2011
CPI inflation falling - weaker price (energy) pressures…
Sectoral output in UK, services bounce back,
manufacturing static, construction significant fall…
UK goods exports to EU and non-EU countries shows
shift to non-EU markets…
Debt as a % of GDP 2009/2010
GDP to debt ratios across EU countries…
Bank lending conditions
Bank lending conditions improving, but…
Interest rates on 10 year Government bonds
Rising public debt in Advanced Economies, compared
with emerging & developing economies (1950-2012)
Rise of the BRICS, despite slowdown in output over last
two years…
The future for the UK, Europe and International Trade
Key observations
•
•
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•
•
•
•
•
•
•
•
A long term project
Period of non-convergence masked
Inevitability – and pain – of fiscal union
Democratic deficit
Difficulties of 27 veto players
Bloc benefit, even for Greece
Protector effect “big boat”
Potential catastrophe of exit
Sufficient centrifugal forces for survival
Difficult to optimise
Slow & unsteady
Baron Frankal
Director of Economic Strategy, New Economy
[email protected]