Session 3 : Quelle gouvernance pour quelle croissance en Europe?

Transcription

1 Session 3 : Quelle gouvernance pour quelle croissance en Europe? Natacha Valla 24 Septembre 212 Goldman Sachs Global Economics, Commodities and Strategy Research Goldman Sachs Global Economics, Commodities and Strategy Research 1 Natacha valla@gs com

2 Gouvernance, croissance Les 4 piliers des Présidents (rapport de Juin 212) Union bancaire Union budgétaire Politique économique commune Démocratie La BCE et la time consistency Croissance: dynamique de crise versus modèle de long-terme Goldman Sachs Global Economics, Commodities and Strategy Research 2

3 Intra-Euro area cross-country divergence is driven by impact of fiscal austerity. -.2 ppt Source: GS Global ECS Research Fiscal drag in 212 Fiscal drag in 213 France Goldman Sachs Global Economics, Commodities and Strategy Research 3

4 Financial conditions diverge significantly between core and periphery Financial conditions Index avg. 27=1 Tightening conditions The index includes four variables: real 3-month interest rates, real long-term interest rates, real trade-weighted value of the exchange rate and equity market capitalisation to GDP Source: GS Global ECS Research, ECB Goldman Sachs Global Economics, Commodities and Strategy Research 4

5 From area-wide perspective, divergence can start to address competitiveness issues unit labour costs, index 2Q1=1 France Ireland Greece* Portugal Source: Eurostat, National Statistical offices, GS Global ECS Research Goldman Sachs Global Economics, Commodities and Strategy Research 5

6 Treatment of the programme countries (migration onto official balance sheet) PSI accelerated migration of Greek debt onto official balance sheets EUR bn Bilateral Loans from EU (Greece 1) EUR 53Bn EFSF Greece 2 EUR112 Bn EFSF/EFSM Ireland EUR 45Bn EFSF/EFSM Portugal EUR 52Bn Official Sector Privately Held Source: ECB, GS Global ECS Research EFSF/EFSM EUR 191Bn Under 2nd package Spanish Banks EUR 1 Bn Under 1st package ESM EUR 5Bn Remaining capacity after disbursement of committed amount is EUR 691 Bn Even without PSI, Portuguese debt is undergoing in the same migration EUR Bn Greece* Portugal Ireland *Including PSI & the second Greek package EUR Bn Official Sector Privately Held The ECB bought a large part of government debt Purchases outstanding under the Securities Market Program (SMP) May-1 Nov-1 May-11 Nov-11 May-12 Goldman Sachs Global Economics, Commodities and Strategy Research 6

7 External debt is of central concern Change in 1Y Yields (Jun '12 vs. Jan '7, %) Portugal Greece Ireland R² =.87 exc. Greece US Sweden Netherlands France UK Switzerland Norway -1 Net foreign assets (% GDP, 21) There is a high correlation between change in sovereign yields and net foreign assets The correlation between change in sovereign yields and public debt is weaker Change in 1Y Yields (Jun '12 vs. Jan '7, %) Greece s debt problem is external rather than public debt 2 % GDP Gross central government debt 18 Gross general government debt 16 Public and private gross external debt Source: Reinhart and Rogoff (21) "From financial crashto debt crisis", NBER WP s foreign liabilities are skewed towards debt not equity % GDP 1 R² =.32 excl. Greece 1 Portugal 5 Ireland T Switzerland Netherlands France Gvt. debt (% GDP, 211) Norway US Sweden UK Equity Derivatives BdE other Other Deposits Loans Portfolio Money Mkt Insts Portfolio bonds Portfolio Equity Intercompany debt Source: IMF, Eurostat, Datastream, Banco de España,GS Global ECS Research, Goldman Sachs Global Economics, Commodities and Strategy Research 7

8 with intra-euro area imbalances of greatest concern, given manageable area-wide position EA current account is broadly balanced % GDP CA deficit, 27Q4 CA deficit, 211Q4 Japan US UK Euro Area Current account balances have diverged broadly % GDP Current Account NIIP is moderately negative but more balanced than peers % GDP NIIP, 27 NIIP, 211 Japan US UK Euro Area % GDP NIIP...as have NIIP positions -5. France Source: ECB, NCBs, BoJ, UK ONS, US BEA, GS Global ECS Research France Goldman Sachs Global Economics, Commodities and Strategy Research 8

9 Economic forces inflation differentials, migration have begun to address imbalances Peripheral economies had persistently higher inflation pre-crisis Avg. inflation differential VAT increases as a result of their cyclical positions Consumer prices (%yoy, 213 IMF f'cst) AUS FIN NETH FRA GER BEL SPA.4 1. IRE POR ITA R² = Pre-crisis ( ) Latest quarter (212Q1) IRE GRE SPA POR NETH ITA FRA AUS GER Higher wage growth in pre-crisis YoY change in nominal wages (%) France Source: Eurostat, Statistisches Bundesamt, GS Global ECS Research Output gap ( inverted, % of potential GDP,213 IMF f'cst) Net migration to has reverted Goldman Sachs Global Economics, Commodities and Strategy Research 9. 8, 6, 4, 2, -2, -4, -6, -8, -1, Net migration to by nationality GRE Italian Greek Portugese Spanish Dutch

10 and we see some results in terms of changing economic structures has shifted towards tradables during the crisis; has moved in the opposite direction 1. After 15 years of stagnation, house prices are rising again in 2 %, yoy avg. difference between Manuf. and Services PMI, pts to 7/7 since 7/7-2.5 Private consumption growth in is mirroring Private consumption (lhs) (rhs) Source: Markit, Ministerio de Vivienda, Statistisches Bundesamt, Eurostat, GS Global ECS Research After a long drought, German residential construction orders are rising strongly again Goldman Sachs Global Economics, Commodities and Strategy Research Construction output, yoy %

11 but pass-through to rates and credit creation in the periphery has been limited Interest rates on business loans % up to 1mil. above 5Y of maturity France Interest rates to SMEs vary in level and responsiveness Credit standards for SMEs in and % balance (unweighted, past 3mths) Tightening -2 : Change in Credit Standards to SMEs -4 : Change in Credit Standards to SMEs Source: ECB, National Central Banks, GS Global ECS Research %, yoy Area-wide credit creation has stalled Money Supply (M3) Loans to private sector ECB reference value with lending corporates contracting EUR Bn, monthly flow(sa) To Households To Non-Financial Corporates -4 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Goldman Sachs Global Economics, Commodities and Strategy Research 11

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