1. Jaromír Šindel ECES External Imbalance in Eurozone The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague

2. Topics External Imbalance in the USA –reasons, indebtness, sustainability, implications, exchange rate adjustment,... External Imbalance in eurozone –Interest rate convergence, real convergence process, asymmetric situation, no exchange rate adjustment,... External Imbalance in CEEC and euro –Reasons, importance, difference against imbalance during transition process,... The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague

3. External Imbalance in the USA Source: OECD Economic Studies No. 38, 2004/1 Savings in the USA, 1970-2003 (% GDP) The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Ricardian equivalence?

4. External Imbalance in the USA Source: OECD Economic Studies No. 38, 2004/1 Net Savings and Net Investmet in the USA, 1980-2003 (% GDP) The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague I S

5. Sustainability of Ext.Imb.in the USA Current Account Balance in the USA, 1889-2004 (% GDP, before 1929 % GNP) The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Source: OECD Economic Studies No. 38, 2004/1 US Net foreign Assets, 1976-2004 and Projection to 2010 (5 and 3 % CA deficit of GDP)

6. Sustainability of Ext.Imb.in the USA Hypothetical U.S. debt trajectory The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Source: Obsfeld, Rogoff (2004) (CA deficit 4,4 % of GDP and nominal GDP growth 5 %)

7. US external imbalance and USD? When? The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Source: OECD Economic Studies No. 38, 2004/1

8. External imbalance in eurozone Current Account Balance in eurozone in 1980-2006 (as % of GDP) The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague

9. External imbalance in eurozone Asymmetric situation. Standard deviation of CAB/GDP in 1980-2006 The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Note: Only EUR-12_w on the right axis. EUR-9 = EUR-12 without Spain, Greece and Portugal. EUR-12_w is weighted by country GDP share. Figures for 2005-2006 are forecasts by EC. Source: European Commission (2005). Own calculation.

10. CA distribution in enlarged eurozone Asymmetric situation. Standard deviation of CAB/GDP in 1980-2006 The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Note: Figures for 2004-2005 are forecasts by EC. EA and EU without Luxembourg. Source: European Commission (Spring, 2004). Own calculation.

11. CA distribution in enlarged eurozone Asymmetric situation. Standard deviation of weighted CAB/GDP in 1980-2006 The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague Note: Figures for 2004-2005 are forecasts by EC. EA and EU without Luxembourg. Source: European Commission (Spring, 2004). Own calculation.

12. Impact of CEEC The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague