Download Folie 1

Optionen für die
Eurozone
Dr. Daniel Stelter
The two problems of the euro zone
Too much debt
Competitiveness
Total debt (% of GDP)
Unit labor costs, Q1 2000 = 100
500
150
450
419
140
400
348
350
300
250
309
254
259
251
130
241
210
120
200
150
100
229
182
191
213
199
241
183
110
188
50
100
0
0
2000
2011
2000
Note: debt data based on unconsolidated total liabilities (for corporates only loans) at market prices (exception: Belgium non-financial sector debt is consolidated)
Source: Eurostat; bto analysis
2
2012
How to solve the euro crisis?
Address debt
overhang
Restore competitiveness
?
?
?
?
1 Internal devaluation
2 Permanent transfers from north to south
"Is U.S. economic growth over? Faltering innovation confronts the six
GrowRobert
out ofGordon,
the problem
3Source:
headwinds", NBER Working Paper 18315, http://www.nber.org/papers/w18315
4 Organized debt restructuring and growth agenda
5 The inflation solution
6 Debt restructuring and Euro zone exits
3
Stereotyping in Europe
Who is Trustworthy, Arrogant and Compassionate
EU nation most likely to be named...
Views in:
Britain
France
Germany
Italy
Spain
Greece
Poland
Czech Rep.
Source: PEW Research Center
4
Most
Trustworthy
Least
Trustworthy
Most Arrogant
Least
Arrogant
Most Compassionate
Least Compassionate
Joint restructuring the euro zone debt overhang
Pooling excess debt
€1.1T
>90%
€0.3T of GDP
>60% €3.7T
of GDP
€7T
€6T
Non-fin.
Corp.
Private
households
€5.5T
Government
Roll-in of government debt
> 60% of GDP per country
Funding for private sector
recapitalizations for debt > 90%
of GDP per sector and country
Source: Eurostat; bto analysis
5
Refinancing with Eurobonds
€5.1T
Eurozone
redemption fund
Accompanying measures
• Structural and fiscal reforms
• Limits on new indebtedness
• Measures to reduce private
debt LT < 60% of GDP
Features
• Jointly guaranteed to obtain
AAA rating and low rates
• Staggered maturities matching
repayment profile
• Repayment over 20 years
Repayment options
I. Each country repays own debt
II. Reallocation for GIPS debt to
Euro zone average (55% of GDP)
III. Reallocation for all countries
according to GDP
IV. Euro zone wide wealth tax on
household assets
Option I: No reallocation
Without reallocation, debt service costs
Debt burden for Greece already reduced after haircut
Total excess debt and costs to repay over 20 years per country (B€)
1,500
No reallocation
1,000
500
0
EZ 
Excess debt to GDP
57%
49%
27%
63%
72%
49%
67%
179%
108%
51%
% GDP p.a.1
2.4%
2.2%
1.2%
2.8%
3.2%
2.4%
3.1%
7.0%
5.4%
2.3%
% Fin. Ass. p.a.1
0.9%
1.1%
0.7%
1.3%
2.0%
2.0%
1.0%
3.6%
2.4%
1.1%
1. Costs p.a. based on 20 year repayment horizon, interest rate for pooled debt of 2.75%, forecasts for euro zone inflation 2.1%, and real growth 1.7% plus an additional 0.5% growth following structural reforms (different growth forecast assumed for each country) Note: Excess debt
(above 60% for governments, and above 90% of GDP each for household and for non-fin. corporations) is assumed to be pooled and paid down by raising extra taxes. Debt refers to non-consolidated gross debt (exception: Greek government debt is consolidated and Belgium nonfinancial sector debt is consolidated). Data for LTM Q3 2011 (pro-forma after Greek haircut).
Source: Eurostat; ECB; EIU forecasts; bto analysis
6
Option II: Reallocation to GDP for GIPS
Reallocation of GIPS excess debt manageable
Excess debt burden for GIPS reduced to 54% of GDP, for all other countries increased by
4–5 pp
Total excess debt and costs to repay over 20 years per country (B€)
1,500
Reallocation of excess
debt from GIPS to
other countries
1,000
500
0
EZ 
Excess debt to GDP
63%
56%
34%
69%
51%
49%
74%
51%
51%
51%
% GDP p.a.1
2.6%
2.5%
1.5%
3.1%
2.3%
2.4%
3.4%
2.0%
2.6%
2.3%
% Fin. Ass. p.a.1
1.0%
1.2%
0.8%
1.4%
1.4%
2.0%
1.1%
1.0%
1.1%
1.1%
1. Costs p.a. based on 20 year repayment horizon, interest rate for pooled debt of 2.75%, forecasts for euro zone inflation 2.1%, and real growth 1.7% plus an additional 0.5% growth following structural reforms (different growth forecast assumed for each country) Note: Excess debt
(above 60% for governments, and above 90% of GDP each for household and for non-fin. corporations) is assumed to be pooled and paid down by raising extra taxes. Debt refers to non-consolidated gross debt (exception: Greek government debt is consolidated and Belgium nonfinancial sector debt is consolidated). Data for LTM Q3 2011 (pro-forma after Greek haircut).
Source: Eurostat; ECB; EIU forecasts; bto analysis
7
High inflation differential required to
realign competitiveness
8
7
6
5.5
5
4
3
Euro
zone
avg.
= 3.6
3.8
2.5
2
1.3
1
0
0.0
0.0
1.Based on Goldman Sachs calculation: The realignment is supposed to achieve external debt sustainability, so that the net foreign asset or debt position reduces to less than 25% of GDP 2. Average for 2010-12
Source: Thomson Reuters Datastream (Eurostat), CesIfo Working Paper No 4086, Goldman Sachs, European Economic Analyst No 3/2013; bto analysis
8
0.0
Deal with the debt
problem
Redemption
fund
Reform labor markets
Improve education
Implement smart immigration policy
Only together can we make it happen!
9