The euro area in a globalized economy: An ESM perspective

Transcription

1 The euro area in a globalized economy: An ESM perspective Rolf Strauch, Chief Economist, Member of the Management Board 3 rd Annual BBVA European Debt Conference New York, 4 October 217

2 The euro area: a systemic player in global trade Trade openness (exports plus imports of goods and services) % of GDP Euro Area Source: ESM based on national sources Source: ESM Based on national sources China UK Japan

3 The euro area: a systemic player in global trade % 3 25 Euro Area Share of world exports in China 1 5 Japan UK Source: ESM based on IMF 2

4 The euro area: a systemic player in financial markets D bn 35, 3, 25, International investment position: Assets and liabilities vs. rest of the world (216) Euro Area 2, 15, UK 1, 5, China Japan Russia Source: ESM based on IMF Assets Liabilities 3

5 The euro area: a systemic player - The international role of the euro Major currencies weight in global financial markets (216) % of total 7 D EUR JPY RMB International debt Notes: Figures do not add up to 1% as some global currencies are excluded Source: ESM based on ECB International loans 4 Global payment currency

6 The euro area: a systemic player - The international role of the euro Composition of total allocated exchange reserves (217) Yen 5% Australian Dollar 2% Pound Sterling 4% Renminbi 1% Other Currencies 4% Euro 19% Dollar 65% Source: ESM based on IMF 5

7 A stronger euro area: fiscal consolidation % of GDP Fiscal balances of major economies Euro area UK Japan Source: European Commission Economic Forecast Spring 217 6

8 A stronger euro area: improved competitiveness % Reduction in regulation and barriers ( ) UK Euro Area Change in product market regulation indicator Change in barriers to entrepreneurship indicator Change in barriers to trade and investment indicator Notes: Due to data availability, the euro area is comprised of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal and Spain Source: ESM based on OECD 7

9 A stronger euro area: improved competitiveness Number of euro area countries within top 25 best performers (216) Global competitiveness index (WEF) Ease of doing business - resolving insolvency (WB) Ease of doing business - enforcing contracts (WB) Ease of doing business - trading across borders (WB) Ease of doing business (WB) Corruption perception index (TI) Source: ESM based on World Economic Forum (WEF), World Bank (WB) and Transparency International (TI) 8

10 A stronger euro area: building a safety net trillions of D Evolution of Global Financial Safety Net (GFSN) Euro Area's contribution % increase in 1 years Nearly half of it from the Euro Area %, BSA 61%, RFAs 27%, IMF IMF quotas Regional Financing Arrangements Bilateral Swap Arrangements - unlimited IMF borrowing Bilateral Swap Arrangements - limited 9

11 A stronger euro area: the robust recovery % 4 GDP per capita growth 2 Euro area Source: EC European Economic Forecast Spring 217, AMECO 1

12 A stronger euro area: the robust recovery Employment rate in euro area and since 2 (Cumulative change in percentage point) 6 Euro area Source: Eurostat and BLS 11

13 A stronger euro area: the robust recovery 43 Gini coefficient ( = perfect equality; 1 = maximal inequality) Italy Germany France Source: Eurostat, World Bank 12

14 Next steps for the euro area: Risk sharing needs Economic risk sharing in the euro area is lagging behind the Percentage of shock smoothed by different channels Credit market Capital market Fiscal EU EMU Canada Germany Source: Bruegel and IMF 13

15 Next steps for the euro area: Policy proposals No full Fiscal Union needed No full Political Union needed Complete Banking Union European Deposit Insurance Backstop for the SRF Capital Markets Union To facilitate private sector efforts for financial integration More capital flows, more risk sharing Address taxation, insolvency and company law issues Fiscal Union Limited fiscal capacity for the euro area 14