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1 The Eurozone Crisis: Causes and Solutions Klaas Knot President, De Nederlandsche Bank Asia Society, Hongkong 15 October 2012.

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Presentation on theme: "1 The Eurozone Crisis: Causes and Solutions Klaas Knot President, De Nederlandsche Bank Asia Society, Hongkong 15 October 2012."— Presentation transcript:

1 1 The Eurozone Crisis: Causes and Solutions Klaas Knot President, De Nederlandsche Bank Asia Society, Hongkong 15 October 2012

2 2 The eurozone and the global economy

3 3 European debt crisis

4 4 Some convergence prior to the crisis... Cumulative growth differentials with Germany

5 5 … but with borrowed money … Average annual growth rate of credit to private sector:

6 6 … and accompanied by inflation… Cumulative differentials compared to EMU total :

7 7 …reflecting wage developments

8 8 Current account balance percent of GDP

9 9 Governments went back to old habits Start EMU Budget deficits (% Gdp) Improvements in the run-up to EMU but relapse after admission

10 10 “ On/off ” market discipline

11 11 A stable design of EMU Strengthening growth potential and competitiveness Politically independent enforcement of the fiscal rules, guarding the debt ceiling of 60% European supervision, resolution and DGS Eurobonds as the capstone of EMU?


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