eurozone crisis ppt 2.pptx
TRANSCRIPT
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Euro Zone CrisisIts Dimensions and Implications
Adisetyo NugrohoAndre Pujihantoro
Kevin Dayandra
Rabbi Amrita
Rizky Andhika Putra
Yohanes Paulus Bimoseno
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Circumstances and implication of Euro currency
formation
Background
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Crisis is not merely related to sovereign debt
and bank financials
Background
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How crisis is spreading from one euro zone
economy to the next
Background
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Problems
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Global Economic crisis 2008
pemicu meningkatnya hutang dan
menurunnya pertumbuhan Negara-negara
eropa termasuk juga Negara-negara anggota
European Union
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2010 : Sovereign Debt crisis
Peminjaman yang berlebihan oleh bank
menyebabkan terlalu banyak gagal bayar dan
juga menyebabkan Negara-negara di eropa
mengalami deficit fiscal yang besar.
Anggota European Union tidak bisa seenaknya
mencetak uang
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Negara-negara krisis
1. Portugal
2. Ireland
3. Italy
4. Greece -> Penyebab utama
5. Spain
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Greece
Fiscal deficit sebesar 12,7 persen dari GDP dan
memiliki utang public sebesar 113% dari GDP
yunani di tahun 2009
EU dan IMF sudah melakukan Baillout
sejumlah 219 milyar euro kepada Yunani
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EFSE
. EFSE didirikan oleh 27 negara anggota EU untukmenjaga kestabilan ekonomi di EU dan jugamembantu anggota yang mengalami kesulitan
financial sell bonds and use the money to make loans up
to a maximum of 440 billion to euro zonenations
Baillout sejumlah 219 milyar euro kepada Yunani,78 milliar euro kepada portugall, dan 85 milliareuro untuk irlandia
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Euro Zone Crisis
Structural
Problems
Souverign
Debt
Bank
Financial
Sistem
Moneter
Fiskal Pertumbuhan
Ekonomi
Debt
profiles
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European Union Problem
EU ingin menyamakan mata uang
Harus memenuhi syarat (inflasi dll)
Fiscal policy diserahkan ke negara
Kontrol tidak kuat
Negara defisit besar menyebabkan krisis
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Intransparency
Negara defisit besar membentuk badan usaha
Berguna untuk mendapatkan utang
Negara mengatakan tidak memilikigovernment debt
Terbongkar ketika Yunani mengganti PM
Diikuti Portugal, Spanyol, Itali, dan Irlandia
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Introduction of the new currency
Convergence in the yield of governement bonds
Interest rate dispersion between rates offerd by banks declined
It is because of common benchmarks and lower transaction costs
Source: Eurostat data
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Credit Boom 2003-2007
Keypoints:
Low Interest Rate
Currency Risk Premium
and FinancialInnovations
Credit Concentrated in
Housing (buildup in
debt from propertyboom)
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Global financial crisis disrupt financial intermediation Marking out the week from the strong
Excessive lending leads to bad debts and fiscal deficits
Sovereign Debt Crisis
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Long Term Interest Rate (%)
France
Germany
Greece
Ireland
Italy
Portugal
Spain
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Sovereign Debt Crisis Greece
Greeces fiscal deficit was
understated (3,7% 12,7%) Public Debt over 113% of GDP
Rating agencies downgraded
their debts
Increase in bond yield and risk
insurance on CDS
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Sovereign Debt Crisis Property Crash
Property Boom
Low Interest Rate
External Borrowing
Property Crash
Bank and Personal debt problem
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Critical Dimensions of the EZ Crisis
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PREVENT ECB or any national Central Bankfrom Financing Government Deficits
Possibility of Fiscal Free riding
Cannot improve through exchange rate
depreciation
EU Budget only 1% of its GDP Not Effective
Lack of Control and Regulation over national
financial institution
A monetary union without a fiscal union
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Varying Productivity and Structural Difference
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Cross Border Lending
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Decision Making System
Unanimity Among Representatives
One decision affect others
ECB constraint in on macroeconomy
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Implication of EZC & Possible Directions
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Advanced Countries
Exposure Problems
Limited capacity to accommodate liquidity of EZeconomies
CHINA Opportunities to diversify foreign
exchange assets
Could gain political mileage,acquire useful and strategicAssets
EMEs
INDIA Bilateral Trade problems
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Possible Directions
Bailout
Fiscal Consolidation
Fiscal Union Peripheral Economies Leaving the EuroZone
(Take it or leave it)
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Conclusion
Multicultural, multilanguage
Many stakeholders outside the Eurozone
Fiscal Union