Ecb draghi competitiveness and growth 20130315

334 views

Published on

ECB President Mario Draghi presented this on growth last week, but I never saw it reported in media.

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
334
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
3
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Ecb draghi competitiveness and growth 20130315

  1. 1. Euro area economic situation and the foundations for growth Presentation by Mario Draghi President of the European Central Bank at the Euro Summit Brussels, 14 March 2013
  2. 2. Economic situation Euro area real GDP (annual % growth rate) 4 4 3 3 2 2 1 1 0 0 ‐1 ‐1 ‐2 ‐2 ‐3 ‐3 ‐4 ‐4 ‐5 ‐5 ‐6 ‐6 2007 2008 2009 2010 2011 2012Latest data: 2012Q4. Sources: Eurostat. 2
  3. 3. Economic situation Euro area unemployment (% of labour force) 26.4 26.220 20 January 2007 January 201318 1816 1614 14 euro area (2013)12 1210 10 euro area (2007) 8 8 6 6 4 4 2 2 0 0 Latest data: January 2013 (December 2012 for Greece and Estonia). Source: Eurostat. 3
  4. 4. External imbalances Current account balance (% of GDP) 20% 20% AT BE DE LU NL ES FR 15% GR IE IT PT Surplus Deficit 15% 10% 10% 5% 5% 0% 0% ‐5% ‐5% ‐10% ‐10% ‐15% ‐15% ‐20% ‐20% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Note: For improved readability, this and subsequent charts only show the countries listed above and do not include FI, EE, SK, SI, CY, MT. Countries are assigned to "Externalsurplus/deficit" group if they had a current account surplus/deficit in 2007 (the last pre-crisis year). “Surplus” countries in blue, “deficit” countries in red.Annual data (smoothed lines). Source: AMECO. 4
  5. 5. Credit situation Bank credit to firms (annual rate of growth)6 64 42 20 0‐2 ‐2‐4 ‐4‐6 ‐6 euro area DE ES FR IT‐8 ‐801/2010 07/2010 01/2011 07/2011 01/2012 07/2012 01/2013Notes: MFI loans to non-financial corporations adjusted for loan sales and securitisation. 3-month moving average.Latest observation January 2013. Source: ECB. 5
  6. 6. Fiscal situation Government deficits (2012) General government debt (2012) (% of GDP) (% of GDP) 7.5 6.7 6.7 1626 6 140 140 Deficit > 3% 3% > Deficit > 2% Deficit < 2% Debt > 90% 90% > Debt > 60% Debt < 60%5 5 120 120 100 1004 4 Maastricht  80 80 criterion3 3 Maastricht criterion 60 602 2 40 401 1 20 20 ‐0.20 0 0 0 Note: Budget balance is corrected for capital injections into banks. Source: European Commission 2013 Winter Economic Forecast. 6
  7. 7. Economic situation Euro area real GDP (annual % growth rate) 4 4 3 3 2 2 1 1 0 0‐1 ‐1‐2 ‐2‐3 ‐3 Net exports Domestic demand GDP‐4 ‐4 4.0 -6.0 ECB projection range 2222 2222‐5 ‐5‐6 ‐6 2007 2008 2009 2010 2011 2012 2013 2014Latest data: 2012Q4. Sources: Eurostat, ECB, EC. 7
  8. 8. Foundations for growth Where does growth come from? - strengthening of global demand - supportive monetary policy anchoring price stability - and restoring :Confidence Competitiveness Credit 8
  9. 9. The competitiveness problem Wage and productivity developments Compensation Productivity145 145 122 122 Compensation per employee Productivity140 140 120 120 (deficit countries) (deficit countries) 118 118135 Compensation per employee 135 Productivity 116 116 (surplus countries) (surplus countries)130 130 114 114125 125 112 112120 120 110 110 108 108115 115 106 106110 110 104 104105 105 102 102100 100 100 100 Note: 1999 = 100. Total economy. Productivity is defined as real GDP per employee. GDP-weighted average by country group. Annual data (smoothed lines). Source: AMECO. 9
  10. 10. Country perspective (selection) Wage and productivity developments Austria Germany Portugal 150 150 150 150 150 150 Compensation per employee Compensation per employee Compensation per employee 145 145 145 145 145 145 Productivity Productivity Productivity 140 140 140 140 140 140 135 135 135 135 135 135 130 130 130 130 130 130 125 125 125 125 125 125 120 120 120 120 120 120 115 115 115 115 115 115 110 110 110 110 110 110 105 105 105 105 105 105 100 100 100 100 100 100 1999 2001 2003 2005 2007 2009 2011 1999 2001 2003 2005 2007 2009 2011 1999 2001 2003 2005 2007 2009 2011 France Spain Italy 150 150 150 150 150 150 Compensation per employee Compensation per employee Compensation per employee 145 145 145 145 145 145 140 Productivity 140 Productivity Productivity 140 140 140 140 135 135 135 135 135 135 130 130 130 130 130 130 125 125 125 125 125 125 120 120 120 120 120 120 115 115 115 115 115 115 110 110 110 110 110 110 105 105 105 105 105 105 100 100 1999 2001 2003 2005 2007 2009 2011 100 100 100 100 1999 2001 2003 2005 2007 2009 2011 1999 2001 2003 2005 2007 2009 2011Note: 1999 = 100. Total economy. Productivity is defined as real GDP per employee. Annual data (smoothed lines). Source: AMECO. 10
  11. 11. Profitability problems Business margins Negotiated wages and employment (%, national accounts)34 34 110 110 Ext. surplus group32 32 108 108 Ext. deficit group 106 10630 30 104 10428 28 102 10226 26 100 10024 24 98 9822 22 96 9620 20 94 94 2008 2009 2010 2011 2012 Net operating surplus / value added for nonfinancial corporations (4-quarter averages) Negotiated wages ‐  External surplus countries Latest observation: 2012Q3. Sources: Eurostat, ECB. Right-hand chart: Employment ‐  External surplus countries Note: 1999 = 100. GDP-weighted average by country group. Due to data availability, Negotiated wages ‐ External deficit countries “External surplus” group does not include Luxembourg, and “External deficit” group does not include Greece and Ireland. Annual data (smoothed lines). Employment ‐  External deficit countries 94 94 Source: Eurostat. 2008 11
  12. 12. Confidence returning Corporate bond yields Government bond yields (percentage points) (percentage points) First 3‐yr LTRO OMT announced OMT announced8 8 7 15 6.5 137 7 Return of  Return of  confidence 6 11 confidence6 6 5.5 95 5 5 74 4 4.5 5 Spain Italy Medium‐grade bonds Portugal (rhs) Ireland (rhs)3 3 4 3Jul‐11 Oct‐11 Jan‐12 Apr‐12 Jul‐12 Oct‐12 Jan‐13 Apr‐12 Jun‐12 Aug‐12 Oct‐12 Dec‐12 Feb‐13Note: EMU all maturities. Monthly data; Latest data: February 2013. Note: 3-month moving average of monthly data. Latest data: February 2013.Sources: BofA Merril Lynch, Datastream and ECB calculations. Sources: Thomson Reuters and ECB calculations. 12
  13. 13. Problems for smaller firms Interest rate on new loans to firms (Loans up to EUR 1 million to firms, percent per annum)7 76 65 54 43 3 Germany Spain France Italy2 2 2008 2009 2010 2011 2012 2013Source: ECB. 13
  14. 14. Fiscal progress Government deficits in 2009 and 2012 (% of GDP) 15.6 12 12 2009 2012 10 10 8 8 6 6 4 4 2 2 ‐0.2  0 0 Note: Budget balance is corrected for capital injections into banks. Source: European Commissions winter 2013 economic forecast and ESCB. 14
  15. 15. Conclusions1. Review of product and labour markets to see whether they are compatible with participation in monetary union2. Reform contracts for countries with pressing competitiveness problems.3. Full implementation of Single Market legislation 15

×