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Georg Milbradt, TUD1 Fixing of exchange rates Virtual Euro introduction Tatsächliche Einführung Interest Rates for 10 Years Gov Bonds Quelle: Nationale.

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Presentation on theme: "Georg Milbradt, TUD1 Fixing of exchange rates Virtual Euro introduction Tatsächliche Einführung Interest Rates for 10 Years Gov Bonds Quelle: Nationale."— Presentation transcript:

1 Georg Milbradt, TUD1 Fixing of exchange rates Virtual Euro introduction Tatsächliche Einführung Interest Rates for 10 Years Gov Bonds Quelle: Nationale Zentralbanken, H.-W. Sinn, ifo Institut, München. % März 2011 Italy Germany 2 4 6 8 10 12 14 9495969798990001020304050607080910 11 France Greece 2,0 4,0 6,0 8,0 10,0 12,0 2009201020082011 7. Mai 28. April 30. März Germany Italy Spain France Ireland Portugal Greece

2 Georg Milbradt, TUD2 Quelle: EEAG, 2011, S.76 2

3 Georg Milbradt, TUD3 Current Account Balance in % GDP (2009) -15-10-5-50 5 10 -11,2Greece -10,3 Portugal -8,3 Cyprus -5,4Spain -3,9Malta -3,2Slowakiai -3,2Italy -2,9Ireland -2,2 France -1,0Slowenia 0,5 Belgium 1,3 Finland 3,2 Austria* 4,9 Germany 5,4 Netherlands 5,6 Luxembourg % des BIP * 2008 3 Quelle: H.-W. Sinn, ifo Institut, München

4 Georg Milbradt, TUD4 959697989900010203040905060708 10 20 30 40 70 80 90 100 110 120 130 60 50 Ireland UK* 23. September 2009 Spain -24% -17% -16%** Germany France Italy 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

5 1999200020012002200320042005200620072008200920102011 -50 0 50 100 150 200 250 300 350 400 Milliarden Euro Quelle: Eurostat; EZB; Deutsche Bundesbank. Target 2 – The Unknown Rescue Mechanism TARGET2 Bundesbank Accummulated current account deficits of GIPS March 2011 323 vbn Euro 4th Q. 2010: 315 bln Euro Dec. 2010: 326 bln Euro ECB Money Supply 1,061 bln Euro ( 8th March 2011) Quelle: Hans-Werner Sinn, ifo; Nichts als Zeitgewinn 5 Georg Milbradt, TUD

6 Target 2- Balances Quelle: Hans-Werner Sinn; Nichts als Zeitgewinn 6Georg Milbradt, TUD

7 ECB Purchase of Gov Bonds IMF Rescue Package Greece EU Rescue Package Greece IMF with ESM TARGET-Liabilities (only GIPS) Guaranties (ESM) Cash (ESM) 80 344 1480 620 250 80 76 30 115 25 2 27 15 22 168 373 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

8 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, TUD8

9 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, TUD9

10 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


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