Transcript PPT for Eurozone Crisis - The University of Nottingham Ningbo China

欧洲债务危机：
原因，解决方法及对中国的影响
Eurozone Crisis：
Origin, Solutions and Impact on China
Michele Geraci （杰拉奇）
Head of China Program - Global Policy Institute
Senior Research Fellow and Adjunct Professor of Finance -Zhejiang University
Visiting Assistant Professor of Finance – University of Nottingham, Ningbo
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Global Policy Institute
Personal Introduction
• Head of China – Global Policy Institute, London
• Senior Research Fellow and Adjunct Professor of Finance –
Zhejiang University
• Visiting Assistant Professor of Finance – Nottingham University
• Electronic Engineering – Graduate degree, University of Palermo
(University College London)
• Master in Business Administration (MBA) - Massachusetts Institute
of Technology, Sloan School of Management
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Personal Introduction
• Merrill Lynch Investment Banking – Associate
• Donaldson, Lufkin and Jenrette – Vice President, Head of Latin
America and Co-Head of Europe Telecom Research
• Bank of America – Director, Co-Head of Europe Telecoms
• Pali Capital – Managing Director, Head of Europe Telecoms
• Schroders Asset Management – Head of European Media, Telecom
3
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Agenda
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•
•
•
•
Introduction to the EU and the Eurozone
Reasons for the current crisis
Impact on China
Recent Events
Q&A
4
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Other Data
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Other Data
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Other Data
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Europe：brief history
•
•
•
•
•
•
1945 - End of WWII
1952 – Treaty of Paris signed (France, Italy, Holland, Belgium and
Germany): European Community formally established
1958 – Treaty of Rome signed
1973 – England joins
1992：Treaty of Maastricht – path to Eurozone
2012：27 countries are part of the EU。
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Message 1： Not Long after the end of WWI, Europe
had been re-united
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EU System
•
•
•
•
•
Free flow of goods and services
Tax-free trade area
Free flow of people
No custom, no need for ID card (ex Schengen)
All citizens from any of the 27 countries enjoys
same rights and befenits
Message2: EU basically looks as if it was a single
country
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Eurzozone:’99
First Stage
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Eurozone ‘01：
Greece joins
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Eurozone ‘12：
17 countries
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Convergence Criteria：趋同标准
• If a country wants to join the Eurozone, it
must fulfill certain conditions
• 如果一个国家想加入欧元区，他就必须满
足几个条件。
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Convergence Criteria：趋同标准
• Inflation Rate （通货膨胀）: <1.5% higher than av. of
best three other countries
• Government Deficit/GDP (政府赤字） <3%
• Government Debt/GDP （政府债务与GDP比率）<60%
• Interest Rates (利息率）< 2% more than three lowest
countries
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Inflation
奥地利
比利时
2003
2004
2005
Inflation
2006
2007
2008
2009
2010
2011
芬兰
法国
德国
希腊
爱尔兰
意大利
卢森堡
马耳他
荷兰
葡萄牙
斯洛伐克
斯洛文尼亚
西班牙
1.3%
1.5%
4.0%
1.4%
1.3%
2.2%
1.0%
3.4%
4.0%
2.8%
2.5%
1.9%
2.2%
3.3%
8.4%
5.7%
3.1%
2.0%
1.9%
1.9%
3.0%
0.1%
2.3%
1.8%
3.0%
2.3%
2.2%
3.2%
2.7%
1.4%
2.5%
7.5%
3.7%
3.1%
2.1%
2.5%
2.0%
4.1%
0.8%
1.9%
1.9%
3.5%
2.1%
2.2%
3.8%
2.5%
1.5%
2.1%
2.8%
2.5%
3.4%
1.7%
2.3%
2.3%
4.5%
1.3%
1.9%
1.8%
3.3%
2.7%
2.2%
3.0%
2.6%
1.7%
3.0%
4.3%
2.5%
3.6%
2.2%
1.8%
2.2%
6.7%
1.6%
1.6%
2.3%
3.0%
2.8%
2.1%
2.7%
0.7%
1.6%
2.4%
1.9%
3.8%
2.8%
3.2%
4.5%
4.4%
10.6%
3.9%
3.2%
2.8%
4.2%
3.1%
3.5%
4.1%
4.7%
2.2%
2.7%
3.9%
5.5%
4.1%
0.4%
0.0%
0.2%
0.2%
1.6%
0.1%
0.2%
1.4%
-1.7%
0.7%
0.0%
1.8%
1.0%
-0.9%
0.9%
0.9%
-0.2%
1.7%
2.3%
2.6%
2.7%
1.7%
1.7%
1.1%
4.7%
-1.6%
1.7%
2.8%
2.0%
0.9%
1.4%
0.7%
2.1%
2.0%
3.6%
3.5%
3.5%
5.1%
3.3%
2.3%
2.5%
3.1%
Smallest
Second Smallest
Third Smalles
1.0%
1.3%
1.3%
0.1%
1.4%
1.8%
0.8%
1.5%
1.9%
1.3%
1.7%
1.7%
0.7%
1.6%
1.6%
2.2%
2.7%
2.8%
-1.7%
-0.9%
-0.2%
-1.6%
0.7%
0.9%
2.1%
2.3%
2.4%
Average
1.2%
1.1%
1.4%
1.5%
1.3%
2.5%
-0.9%
0.0%
2.3%
条件 (Average +1.5%)
2.7%
2.6%
2.9%
3.0% 20
2.8%
4.0%
0.6%
塞浦路斯
爱沙尼亚
2.9%
3.7%
2.4%
2.5%
3.6%
4.1%
2.1%
3.1%
Austria
Belgium
Cyprus
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Malta
Netherlands
Portugal
Slovakia
Slovenia
Spain
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1.5%
3.8%
Inflation
Inflation
奥地利
比利时
塞浦路斯
爱沙尼亚
芬兰
法国
德国
希腊
爱尔兰
意大利
卢森堡
马耳他
荷兰
葡萄牙
斯洛伐克
斯洛文尼亚
西班牙
条件
2003
2004
2005
2006
2007
2008
2009
2010
2011
1.3%
1.5%
4.0%
1.4%
1.3%
2.2%
1.0%
3.4%
2.0%
1.9%
1.9%
3.0%
0.1%
2.3%
1.8%
3.0%
2.1%
2.5%
2.0%
4.1%
0.8%
1.9%
1.9%
3.5%
1.7%
2.3%
2.3%
4.5%
1.3%
1.9%
1.8%
3.3%
2.2%
1.8%
2.2%
6.7%
1.6%
1.6%
2.3%
3.0%
3.2%
4.5%
4.4%
10.6%
3.9%
3.2%
2.8%
4.2%
0.4%
0.0%
0.2%
0.2%
1.6%
0.1%
0.2%
1.4%
1.7%
2.3%
2.6%
2.7%
1.7%
1.7%
1.1%
4.7%
4.0%
2.8%
2.5%
1.9%
2.2%
3.3%
8.4%
5.7%
3.1%
2.3%
2.2%
3.2%
2.7%
1.4%
2.5%
7.5%
3.7%
3.1%
2.1%
2.2%
3.8%
2.5%
1.5%
2.1%
2.8%
2.5%
3.4%
2.7%
2.2%
3.0%
2.6%
1.7%
3.0%
4.3%
2.5%
3.6%
2.8%
2.1%
2.7%
0.7%
1.6%
2.4%
1.9%
3.8%
2.8%
3.1%
3.5%
4.1%
4.7%
2.2%
2.7%
3.9%
5.5%
4.1%
-1.7%
0.7%
0.0%
1.8%
1.0%
-0.9%
0.9%
0.9%
-0.2%
-1.6%
1.7%
2.8%
2.0%
0.9%
1.4%
0.7%
2.1%
2.0%
2.7%
2.6%
2.9%
3.0%
2.8%
4.0%
0.6%
1.5%
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3.6% Austria
3.5% Belgium
3.5% Cyprus
5.1% Estonia
3.3% Finland
2.3% France
2.5% Germany
3.1% Greece
Ireland
2.9% Italy
3.7% Luxembourg
2.4% Malta
2.5% Netherlands
3.6% Portugal
4.1% Slovakia
2.1% Slovenia
3.1% Spain
3.8%
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Government Deficit 财政赤字
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Government Deficit
0.0%
0.4%
-2.2%
-0.1%
5.1%
-1.5%
-3.1%
-4.5%
0.9%
-3.1%
6.1%
-6.4%
-0.2%
-4.3%
-6.5%
-4.0%
-0.5%
-1.9%
-3%
-0.7%
-0.1%
-4.4%
0.3%
4.1%
-3.1%
-3.8%
-4.8%
-0.4%
-3.1%
2.1%
-5.8%
-2.1%
-2.9%
-8.2%
-2.4%
-0.2%
-2.6%
-3%
-1.5%
-0.1%
-6.6%
1.7%
2.6%
-4.1%
-4.2%
-5.6%
0.4%
-3.6%
0.5%
-9.2%
-3.1%
-3.0%
-2.8%
-2.7%
-0.3%
-3.1%
-3%
-4.4%
-0.3%
-4.1%
1.6%
2.5%
-3.6%
-3.8%
-7.5%
1.4%
-3.5%
-1.1%
-4.7%
-1.7%
-3.4%
-2.4%
-2.3%
-0.1%
-2.9%
-3%
-1.7%
-2.7%
-2.4%
1.6%
2.8%
-2.9%
-3.3%
-5.2%
1.7%
-4.4%
0.0%
-2.9%
-0.3%
-5.9%
-2.8%
-1.5%
1.3%
-2.5%
-3%
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-1.5%
0.1%
-1.2%
2.5%
4.1%
-2.3%
-1.6%
-5.7%
2.9%
-3.4%
1.4%
-2.8%
0.5%
-4.1%
-3.2%
-1.4%
2.4%
-1.3%
-3%
2009
2008
2007
2006
2005
2004
2003
2002
2001
奥地利
比利时
塞浦路斯
爱沙尼亚
芬兰
法国
德国
希腊
爱尔兰
意大利
卢森堡
马耳他
荷兰
葡萄牙
斯洛伐克
斯洛文尼亚
西班牙
欧元区
条约的条件
-0.9%
-0.3%
3.5%
2.4%
5.3%
-2.7%
0.2%
-6.5%
0.1%
-1.6%
3.7%
-2.4%
0.2%
-3.1%
-1.8%
0.0%
1.9%
-0.7%
-3%
-0.9%
-1.3%
0.9%
-2.9%
4.3%
-3.3%
-0.1%
-9.8%
-7.3%
-2.7%
3.0%
-4.6%
0.5%
-3.6%
-2.1%
-1.9%
-4.5%
-2.1%
-3%
-4.1%
-5.8%
-6.1%
-2.0%
-2.5%
-7.5%
-3.2%
-15.8%
-14.2%
-5.4%
-0.9%
-3.7%
-5.6%
-10.1%
-8.0%
-6.1%
-11.2%
-6.4%
-3%
2010
-4.4%
-4.1%
-5.3%
0.2%
-2.5%
-7.1%
-4.3%
-10.6%
-31.3%
-4.6%
-1.1%
-3.6%
-5.1%
-9.8%
-7.7%
-5.8%
-9.3%
-6.2%
-3%
Austria
Belgium
Cyprus
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Malta
Netherlands
Portugal
Slovakia
Slovenia
Spain
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Criteria
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Government Deficit
2001
奥地利
比利时
塞浦路斯
爱沙尼亚
芬兰
法国
德国
希腊
爱尔兰
意大利
卢森堡
马耳他
荷兰
葡萄牙
斯洛伐克
斯洛文尼亚
西班牙
欧元区
条约的条件
2002
0.0%
0.4%
-2.2%
-0.1%
5.1%
-1.5%
-3.1%
-4.5%
0.9%
-3.1%
6.1%
-6.4%
-0.2%
-4.3%
-6.5%
-4.0%
-0.5%
-1.9%
-3%
2003
-0.7%
-0.1%
-4.4%
0.3%
4.1%
-3.1%
-3.8%
-4.8%
-0.4%
-3.1%
2.1%
-5.8%
-2.1%
-2.9%
-8.2%
-2.4%
-0.2%
-2.6%
-3%
2004
-1.5%
-0.1%
-6.6%
1.7%
2.6%
-4.1%
-4.2%
-5.6%
0.4%
-3.6%
0.5%
-9.2%
-3.1%
-3.0%
-2.8%
-2.7%
-0.3%
-3.1%
-3%
2005
-4.4%
-0.3%
-4.1%
1.6%
2.5%
-3.6%
-3.8%
-7.5%
1.4%
-3.5%
-1.1%
-4.7%
-1.7%
-3.4%
-2.4%
-2.3%
-0.1%
-2.9%
-3%
2006
-1.7%
-2.7%
-2.4%
1.6%
2.8%
-2.9%
-3.3%
-5.2%
1.7%
-4.4%
0.0%
-2.9%
-0.3%
-5.9%
-2.8%
-1.5%
1.3%
-2.5%
-3%
2007
-1.5%
0.1%
-1.2%
2.5%
4.1%
-2.3%
-1.6%
-5.7%
2.9%
-3.4%
1.4%
-2.8%
0.5%
-4.1%
-3.2%
-1.4%
2.4%
-1.3%
-3%
2008
-0.9%
-0.3%
3.5%
2.4%
5.3%
-2.7%
0.2%
-6.5%
0.1%
-1.6%
3.7%
-2.4%
0.2%
-3.1%
-1.8%
0.0%
1.9%
-0.7%
-3%
2009
-0.9%
-1.3%
0.9%
-2.9%
4.3%
-3.3%
-0.1%
-9.8%
-7.3%
-2.7%
3.0%
-4.6%
0.5%
-3.6%
-2.1%
-1.9%
-4.5%
-2.1%
-3%
-4.1%
-5.8%
-6.1%
-2.0%
-2.5%
-7.5%
-3.2%
-15.8%
-14.2%
-5.4%
-0.9%
-3.7%
-5.6%
-10.1%
-8.0%
-6.1%
-11.2%
-6.4%
-3%
2010
-4.4%
-4.1%
-5.3%
0.2%
-2.5%
-7.1%
-4.3%
-10.6%
-31.3%
-4.6%
-1.1%
-3.6%
-5.1%
-9.8%
-7.7%
-5.8%
-9.3%
-6.2%
-3%
Austria
Belgium
Cyprus
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Malta
Netherlands
Portugal
Slovakia
Slovenia
Spain
Euro17
Criteria
GRE, ITA, POR
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almost always24exceed criteria
Debt/GDP
Spain:
RE
bubble
four countries “always”exceededGlobal
criteria
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Debt/GDP
Attention：France and Germany are not too ‘in
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26
good shape, either
Debt/GDP
Eurozone and EU members performance: UK???
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Interest Rates
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Convergence Criteria：met or not？
• Inflation：in 2010， 12 countries did not meet criteria！
• Gov’t Deficit：in ’09 and ‘10，15 countries did not meet
criteria!
• Debt/GDP: Greece and Italy ratio always above: EU
average always above criteria!
Message 3: Eurozone：basically, never met,
almost never,
at least Global Policy Institute
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Why Greece so serious？
Message 4：“reciprocal help”:
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this concept is now in doubt
Crisis: Soft reasons
• 27 countries
• 27 electoral democracies，54 different
points of view！
• Culture, history, technology, language，
custom, food，economic structure，social
structure, etc..not at all the same！
Message 5：Unification process not easy
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Crisis“hard”reasons
•
•
•
•
•
•
•
•
Relaxed lending practices
Excessive investment
Risk assessment not proper
Global Imbalances
Improper fiscal policies
Socialise losses
Contagion Problems
Single Currency!!!
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Trade Imbalance, leading to protectionism
Reaganomics
Benefits to Chinese
exports
Financing US
consumption
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Accumulation of
FX Reserves
Purchase of US
bonds
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Crisis：3 examples
• Ireland
• Greece
• Italy
Excessive Inv，Real Estate
Civil Servants and salaries
loss of competiveness，low
efficiency ratios
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Reasons for the crisis
We must acknowledge that Europe faces
two distinct problems: Sovereign Debt crisis
and Eurozone Crisis
• The first one is due to individual countries
bad fiscal policies
• The second is due to structural problems。
Message 6：Debt crisis and
Eurozone crisis
areInstitute
two
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35
Conditions for monetary area
1.
2.
3.
4.
Relax the mandate of the ECB
财政整合 – Fiscal Integration
Fully implement people’s mobility (Dakota)
。。。？？？
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Possible Solutions
1. Generally, Central banks look after inflation and
economic growth: a balanced mandate, but..
2. ECB’s only responsibility is price stability (CPI)：
– Unrealistic goal （17 countries）
– ECB is not concerned with stimulating growth
3. AND, even worse, When you have debt you should
push inflation up, but that is not what the ECB does
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Possible Solutions
2. Eurozone has no fiscal integration
– currently, each country look after its own
budget
– What about China and the US？
– A German tax envoy goes to Greece to collect
taxes and decides to spend the money in
Berlin
– Can people accept this？
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Possible Solutions
3. Realize full people mobility
–
–
–
–
Easy in theory, not in practice
Language, culture, society, political systems
What about China and the US？
Dakota can be emptied, but Belgium?
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Possible Solutions
4. Break up of the EURO！
– Or, reduce the scope
– Re-introduce individual currencies
– Every country can choose its own monetary policy
（print money）
– Can depreciate currency，stimulate exports (Short
term is fine)
– Painful in the short term ， but successful in the long
term
PIIGS can leave, or Germany can leave EUROzone
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Possible Solutions
Message 7：Sacrifice the Euro
to Save the European Union
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欧元区已经解体了
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Impact on China
• The Chinese economy, as a whole, is becoming
less dependent on exports…apparently
• This year, there maybe a trade deficit
Therefore…
A slowing demand from Europe for Chinese goods
is not going to have a big impact on Chinese
economy – True?
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Key points on the RMB
• Countries have sovereign right to set it
exchange rate as they wish (US, Italy, UK)
• No one knows the real value of the RMB
• The impact of a possible revaluation of
RMB on US exports in far from clear,
• But, impact on China can be negative
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Plaza Accord and US$ devaluation
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Impact on China
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Impact on China
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Impact on China
• China should come to the rescue of
Europe
• Not for charity, but to protect it’s own
interest
• Chinese policy makers may underestimate
this problem
Message 8：Chinese policy makers must pay closer
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attention
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Summary
1
Not Long after the end of WWI, Europe had been re-united
2
EU basically looks as if it was a single country
3
Eurozone：basically, never met, almost never, at least
4
“reciprocal help”:this concept is now in doubt
5
Unification process not easy
6
Debt crisis and Eurozone crisis are two different things
7
Sacrifice the Euro to Save the European Union
8
Chinese policy makers must pay closer attention
最近的时间
• 2011 年10月份：欧盟高峰会：新的财政条
约
• 2012年三月份：希腊新的纾困
• 2012年四月份：法国大选
50
Global Policy Institute