1 Interest Rates Chapter 4. 2 Types of Rates Treasury rates LIBOR rates Repo rates.
Georg Milbradt, TUD1 Fixing of exchange rates Virtual Euro introduction Tatsächliche Einführung...
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Transcript of Georg Milbradt, TUD1 Fixing of exchange rates Virtual Euro introduction Tatsächliche Einführung...
Georg Milbradt, TUD 1
Fixing of exchange rates
Virtual Eurointroduction
TatsächlicheEinführung
Interest Rates for 10 Years Gov Bonds
Quelle: Nationale Zentralbanken, H.-W. Sinn, ifo Institut, München.
%
März 2011
ItalyItaly
Germany2
4
6
8
10
12
14
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
France
GreeceGreece2,0
4,0
6,0
8,0
10,0
12,0
2009 20102008 2011
7. Mai
28. April
30. März
Germany
ItalyItalySpainSpain
FranceFrance
IrelandIreland
PortugalPortugal
GreeceGreece
Georg Milbradt, TUD 2Quelle: EEAG, 2011, S.76
Price Increase 1995 - 2009 in %
12
19
21
25
26
28
37
43
44
47
48
51
57
67
0 10 20 30 40 50 60 70 80
Germany
Austria
Finland
France
Belgium
EURO ZONE
Netherlands
Luxembourg
Italy
Ireland
Portugal
Cyprus
Spain
Greece
2
Georg Milbradt, TUD 3
Current Account Balance in % GDP (2009)
-15 -10 -5 0 5 10
-11,2Greece
-10,3Portugal
-8,3Cyprus
-5,4Spain
-3,9Malta
-3,2Slowakiai
-3,2Italy
-2,9Ireland
-2,2France
-1,0Slowenia
0,5Belgium1,3Finland
3,2Austria*4,9Germany
5,4Netherlands
5,6Luxembourg
% des BIP
* 20083
Quelle: H.-W. Sinn, ifo Institut, MünchenQuelle: H.-W. Sinn, ifo Institut, München
Georg Milbradt, TUD 4
95 96 97 98 99 00 01 02 03 04 0905 06 07 0810
20
30
40
70
80
90
100
110
120
130
60
50
IrelandIreland
UK*UK*
23. September 2009
SpainSpain
-24%-24%
-17%-17%
-16%**-16%**GermanyGermany
FranceFrance
ItalyItaly
Real Estate Prices 1996 – 2009
1th Quarter 2006 = 100
* England und Wales.
** Spain: IV Quarter 2008.
Quelle: The Economist and Social Research Institute; UK: Land Registry ; Deutschland: DESTATIS; Frankreich: INSEE; Italien: Banca d`Italia, H.-W. Sinn, ifo Institut, München
4
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-50
0
50
100
150
200
250
300
350
400Milliarden Euro
Quelle: Eurostat; EZB; Deutsche Bundesbank.
Target 2 – The Unknown Rescue Mechanism
TARGET2 Bundesbank
Accummulated current account deficits of GIPS
March 2011323 vbn Euro4th Q. 2010:
315 bln Euro
Dec. 2010: 326 bln EuroECB Money Supply
1,061 bln Euro ( 8th March 2011)
Quelle: Hans-Werner Sinn, ifo; Nichts als Zeitgewinn
5Georg Milbradt, TUD
Target 2- Balances
Quelle: Hans-Werner Sinn; Nichts als Zeitgewinn 6Georg Milbradt, TUD
ECB Purchase of Gov Bonds
IMF Rescue Package GreeceEU Rescue Package Greece
IMF with ESM
TARGET-Liabilities (only GIPS)
Guaranties (ESM)
Cash (ESM) 80
344
1480
620
250
8076
30
11525
227
1522
168
373
German Share Total Default of all GIPS-Countries
Rescue Packages -Total Liabilities
(Bln Euro)
Quelle: Hans-Werner Sinn, ifo; Nichts als Zeitgewinn
Georg Milbradt, TUD 7
Black Mail Potential• European banks – low capital-asset ratio • European Central Bank – risk of losses and
problems with reputation • Governments – fear to face situation and
fiscal consequences before the public• Loyal countries are blackmailed by the
sinners
Buying of time without solutions, problems and imbalances becoming bigger and bigger, solutions more and more expensive
Georg Milbradt, TUD 8
EU Propositions March 2011• Permanent European Stability Mechanism, higher
amount, with cash contributions, priority like IMF, no automatic participation of private creditors, breach of EU treaty legalized by amendment
• Tightened Stability and Growth Pact (speeding up, semi-automatic, inclusion of total debt and other important economic indicators), but still basic decisions by EcoFin-Council
• Euro-Plus-Pact (self commitment of governments to more convergence), no sanctions, fig-leaf
Georg Milbradt, TUD 9
• No improvement without politically accepted defaults of sovereigns and banks
• Otherwise danger of shifting the bill to the tax payers
• Extension of mistakes
Therefore institutional Improvements to avoid black mail:
• Recapitalization of banks• Restriction of the ECB to pure monetary policy• Bankruptcy regulation for states, collective action
clauses
Solutions (I)
10Georg Milbradt, TUD