1 / 14

EUROZONE CRISIS: CAUSES AND POLICY ALTERNATIVES

EUROZONE CRISIS: CAUSES AND POLICY ALTERNATIVES. COSTAS LAPAVITSAS SOAS JUNE 2010. A structural crisis. Causes Strategic policy options. Competitiveness: Nominal Unit Labour Costs. Productivity. In short. Very low wage growth in Germany

willa
Télécharger la présentation

EUROZONE CRISIS: CAUSES AND POLICY ALTERNATIVES

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EUROZONE CRISIS:CAUSES AND POLICYALTERNATIVES COSTAS LAPAVITSAS SOAS JUNE 2010

  2. A structural crisis • Causes • Strategic policy options

  3. Competitiveness: Nominal Unit Labour Costs

  4. Productivity

  5. In short • Very low wage growth in Germany • Generally faster productivity growth in the periphery • Competitiveness gap due to pressure on labour.

  6. Current accounts, % of GDP

  7. Capital and financial accounts, net $ bn

  8. German FDI flows by region, euro, bn

  9. German ‘other’ flows by region, euro, bn

  10. Thus • German competitivess rose due to pressure on labour • Current account surpluses resulted • Surpluses turned into FDI and bank lending, heavily directed to peripheral countries • German (core) banks exposed

  11. General government gross debt

  12. Sovereign debt crisis • Rescuing banks • Collapsing tax revenue • Internal weaknesses of the state • The next phase of the crisis of 2007-9 • Revealed the underlying weaknesses of the eurozone

  13. Alternatives: Default and exit • Advantages • Bring debt back to manageable levels. • Devaluation to boost exports • Recover control of monetary policy • Dangers • Collapse of banks • Inflationary risks

  14. A broad strategy for change • Public control over banks • Control over capital account • Industrial strategy • Income redistribution • Restructuring the state • A policy to shift the balance of economic and social power against capital

More Related