- Germany and France are likely to keep Greece inside the eurozone to reduce financial volatility for their own economies, as they have significant exposure to Greek debt through their banks and private sectors.
- While an exit from the eurozone could allow Greece to devalue its currency and boost exports, it would also be extremely costly and risky due to technical difficulties in converting debts to a new currency and risk of capital flight and banking collapse.
- In the short term, bailouts may continue to be necessary, but Greece will struggle to generate enough revenue to pay back debts due to economic troubles. Long term solutions may require increased fiscal integration across eurozone countries or managed exit strategies.
The Global Economy No. 6 - September 22, 2011Swedbank
The document summarizes the current state of the global economy. It notes that renewed economic pessimism and growing debt concerns have caused stock markets to decline over the summer. While a slowdown has begun, data does not necessarily indicate an imminent recession, though the risk has increased. The document also discusses challenges facing the Eurozone, with comments regarding Greece adding uncertainty. It argues the debt crises must be effectively managed to avoid a global recession, though available policy tools are more limited than in 2008.
The document discusses Santander's 2010 results and 2011 outlook. In 2010, Santander achieved solid profit generation of EUR 8.18 billion despite challenges in mature markets. Credit quality showed improvement, with declining net non-performing loan entries and risk premiums across the group and in main business units. Diversification across geographies helped drive growth, with emerging markets increasing profits despite difficulties in Europe. Santander also strengthened its capital and liquidity positions in 2010.
The document provides an international and domestic macroeconomic outlook. Key points internationally include concerns over Greek debt maturing in March and potential impacts on stock markets. Domestically, industry figures in January are expected to remain weak year-over-year. Recent inflation estimates show a slowing trend towards the 5.5% target for 2012. The current account deficit is expected to widen further in coming months.
Principais destaques:
Semana Passada:
-“O Euro é Irreversível” – Nova política monetária do banco Central Europeu;
-Zona Euro vai continuar a contrair;
-“Grécia: Vais ser expulsa da Zona Euro?”;
-“Espanha: Não tens alternativas”;
Estimativa Europa, não apresentam melhorias;
Estimativa EUA, “Quantitative Easing 3 (QE3), cada vez mais perto”;
Perspectivas para esta semana:
Europa:
Tribunal Constitucional Alemão decide sobre ESM;
Eleições Legislativas Holanda;
Decisão da Troika sobre a Grécia;
Pedido de resgate (cada vez + próximo) por parte de Espanha?
EUA:
Reunião do FED (5ª feira);
Anúncio do “Quantitative Easing 3 (QE3);
Dados macroeconómicos (Inflação, Vendas a retalho, Produção Industrial e Confiança do consumidor);
China:
Dados macroeconómicos Import/Export (indicam abrandamento);
Banco Santander profit of eur 8.181 billion 2010BANCO SANTANDER
Banco Santander reported attributable net profits of EUR 8.181 billion for 2010, down 8.5% from 2009. The results were affected by an extraordinary EUR 472 million provision in Q3 related to new Bank of Spain requirements. Excluding this, profits would have declined 3%. Net interest income grew 11% and net operating income rose 4% to EUR 23,853 million, despite loans growing 6% and deposits 22%. Emerging markets such as Latin America contributed 43% of profits, with Brazil registering a 31% profit increase. Santander maintained its strong capital ratios and liquidity position.
The document discusses Coca-Cola Enterprises' (CCE) priorities for 2010, including driving growth in North America and Europe. In North America, CCE aims to proactively manage through the dynamic environment, evolve price/package architecture, and enhance in-store execution. In Europe, CCE seeks to grow its Red, Black and Silver brands and portfolio, improve customer-centric supply chain, and expand boost zones. CCE also emphasizes corporate responsibility and sustainability initiatives around water stewardship, packaging/recycling, and diversity. Financially, CCE targets consistent earnings growth, maximizing free cash flow, and increasing returns.
NewsLetter "Monthy Perspectives Fincor" Novembro 2012João Pinto
The document provides an overview and analysis of economic and market conditions in October 2012. Some key points:
1) October saw positive performance for risky assets, though the S&P 500 fell for the first time since May. Euro and US financial stocks performed well year-to-date.
2) The world economy maintains trend growth while addressing debt issues, particularly in Europe. Recent US and Chinese data showed some improvement.
3) The US presidential election outcome could impact policy direction. Concerns remain about the ability of US politicians to compromise on fiscal challenges.
4) Country-specific analyses note Portugal's ongoing recession but improved bond yields, while Spain's economic and fiscal outlook remains poor with high
The weekly newsletter provides an overview of global markets and the Irish and European economies. Most markets finished higher despite concerns over government deficits in Europe. The European Commission revised GDP growth estimates upwards for 2010. However, Irish bond spreads widened due to fears the government may need financial assistance. Consumer sentiment in the US fell on fears of higher taxes, while Japan intervened to weaken its currency and support exports. Oil prices declined on lower demand forecasts and a weaker euro. The outlook notes ongoing risks from bank lending and volatility but forecasts global growth of 3.6% in 2010 and 3.3% in 2011. Central banks maintain low rates but bond yields have risen in some stronger economies.
The Global Economy No. 6 - September 22, 2011Swedbank
The document summarizes the current state of the global economy. It notes that renewed economic pessimism and growing debt concerns have caused stock markets to decline over the summer. While a slowdown has begun, data does not necessarily indicate an imminent recession, though the risk has increased. The document also discusses challenges facing the Eurozone, with comments regarding Greece adding uncertainty. It argues the debt crises must be effectively managed to avoid a global recession, though available policy tools are more limited than in 2008.
The document discusses Santander's 2010 results and 2011 outlook. In 2010, Santander achieved solid profit generation of EUR 8.18 billion despite challenges in mature markets. Credit quality showed improvement, with declining net non-performing loan entries and risk premiums across the group and in main business units. Diversification across geographies helped drive growth, with emerging markets increasing profits despite difficulties in Europe. Santander also strengthened its capital and liquidity positions in 2010.
The document provides an international and domestic macroeconomic outlook. Key points internationally include concerns over Greek debt maturing in March and potential impacts on stock markets. Domestically, industry figures in January are expected to remain weak year-over-year. Recent inflation estimates show a slowing trend towards the 5.5% target for 2012. The current account deficit is expected to widen further in coming months.
Principais destaques:
Semana Passada:
-“O Euro é Irreversível” – Nova política monetária do banco Central Europeu;
-Zona Euro vai continuar a contrair;
-“Grécia: Vais ser expulsa da Zona Euro?”;
-“Espanha: Não tens alternativas”;
Estimativa Europa, não apresentam melhorias;
Estimativa EUA, “Quantitative Easing 3 (QE3), cada vez mais perto”;
Perspectivas para esta semana:
Europa:
Tribunal Constitucional Alemão decide sobre ESM;
Eleições Legislativas Holanda;
Decisão da Troika sobre a Grécia;
Pedido de resgate (cada vez + próximo) por parte de Espanha?
EUA:
Reunião do FED (5ª feira);
Anúncio do “Quantitative Easing 3 (QE3);
Dados macroeconómicos (Inflação, Vendas a retalho, Produção Industrial e Confiança do consumidor);
China:
Dados macroeconómicos Import/Export (indicam abrandamento);
Banco Santander profit of eur 8.181 billion 2010BANCO SANTANDER
Banco Santander reported attributable net profits of EUR 8.181 billion for 2010, down 8.5% from 2009. The results were affected by an extraordinary EUR 472 million provision in Q3 related to new Bank of Spain requirements. Excluding this, profits would have declined 3%. Net interest income grew 11% and net operating income rose 4% to EUR 23,853 million, despite loans growing 6% and deposits 22%. Emerging markets such as Latin America contributed 43% of profits, with Brazil registering a 31% profit increase. Santander maintained its strong capital ratios and liquidity position.
The document discusses Coca-Cola Enterprises' (CCE) priorities for 2010, including driving growth in North America and Europe. In North America, CCE aims to proactively manage through the dynamic environment, evolve price/package architecture, and enhance in-store execution. In Europe, CCE seeks to grow its Red, Black and Silver brands and portfolio, improve customer-centric supply chain, and expand boost zones. CCE also emphasizes corporate responsibility and sustainability initiatives around water stewardship, packaging/recycling, and diversity. Financially, CCE targets consistent earnings growth, maximizing free cash flow, and increasing returns.
NewsLetter "Monthy Perspectives Fincor" Novembro 2012João Pinto
The document provides an overview and analysis of economic and market conditions in October 2012. Some key points:
1) October saw positive performance for risky assets, though the S&P 500 fell for the first time since May. Euro and US financial stocks performed well year-to-date.
2) The world economy maintains trend growth while addressing debt issues, particularly in Europe. Recent US and Chinese data showed some improvement.
3) The US presidential election outcome could impact policy direction. Concerns remain about the ability of US politicians to compromise on fiscal challenges.
4) Country-specific analyses note Portugal's ongoing recession but improved bond yields, while Spain's economic and fiscal outlook remains poor with high
The weekly newsletter provides an overview of global markets and the Irish and European economies. Most markets finished higher despite concerns over government deficits in Europe. The European Commission revised GDP growth estimates upwards for 2010. However, Irish bond spreads widened due to fears the government may need financial assistance. Consumer sentiment in the US fell on fears of higher taxes, while Japan intervened to weaken its currency and support exports. Oil prices declined on lower demand forecasts and a weaker euro. The outlook notes ongoing risks from bank lending and volatility but forecasts global growth of 3.6% in 2010 and 3.3% in 2011. Central banks maintain low rates but bond yields have risen in some stronger economies.
The document summarizes AkzoNobel's Q4 and full year 2010 results. Key highlights include 12% revenue growth in 2010 to €14.6 billion, with EBITDA up 16% to €1.96 billion. Revenue growth was driven by 6% volume increase and 6% price increases. Decorative Paints revenue grew 9% in 2010 and Performance Coatings revenue increased 16%. The CEO outlined medium-term strategic goals including growing revenue to €20 billion and maintaining a 13-15% EBITDA margin.
The document is a presentation by Mark Stromberg from Gartner that discusses the economic outlook for 2009 and the semiconductor industry. It provides forecasts showing steep declines in GDP, electronics spending, semiconductor revenue, and other metrics in 2009 due to the recession. It also discusses signs that would indicate recovery, such as a return to GDP growth in the US in the third quarter of 2009. The presentation outlines waves of recovery expected across different device application sectors from 2009 to 2011 if GDP growth returns in the third quarter of 2009.
The document is a weekly market perspectives report from Fincor- Sociedade Corretora, S.A. dated September 10th, 2012. It provides a summary of recent economic events and data in Europe and the US, as well as previews of key events and data expected for the coming week. Specifically, it discusses the ECB's new bond-buying program, weak economic data from Europe and the US, expectations for further monetary easing from the Fed, and suggests buying shares of the Portuguese bank BES.
The document summarizes key points from a lecture on sources of future economic growth in the UK:
1) The UK experienced a deep recession from 2008-2009 but recovery has been "V-shaped", similar to recessions in the early 1980s.
2) The government's austerity program aims to reduce the deficit significantly by 2015-2016 but front-loading cuts in 2011-2012 risks slowing the recovery.
3) The recession may have caused permanent loss of output and reduced the trend growth rate to about 2%, down from past averages, due to issues like long-term unemployment and reduced business investment.
This document provides a European Economic Forecast for winter 2013. It summarizes the economic outlook for the European Union and individual member states. The EU economy is gradually overcoming headwinds, but risks remain. Growth is expected to remain weak across most member states, with net exports being the main driver of growth for some countries. Unemployment rates are projected to remain high or continue rising in many EU countries.
Presentation, Economic Outlook for 2013 and Beyond, presented by Michael Brown, Wells Fargo Securities, presented at Winter 2012 NCLGBA Conference, 12/7/12
This document discusses government debt and fiscal deficits in Central and Eastern European (CEE) countries compared to other parts of Europe and the US. The key points are:
1) Public debt levels in CEE countries are generally lower than the Eurozone average, with most below 60% of GDP except for Hungary which is below the average at 77% of GDP.
2) Foreign ownership of government bonds is relatively low in CEE countries, around a quarter of debt on average compared to two thirds in Greece.
3) While budget consolidation is important, growth rates in the CEE region are above developed markets so deficits differ, with lower deficits where growth is higher.
SANTANDER CONSUMER FINANCE-SANTANDER INVESTOR DAY 2011BANCO SANTANDER
Santander Consumer Finance se mueve en niveles récord de beneficios en 2011 y continuará haciéndolo en 2012 y 2013. Presentación Magda Salarich. Santander Investor Day 2011
Merrill Lynch Global Telco and Media Conference - Marco Patuano presentation ...Gruppo TIM
Telecom Italia provided an update on its performance in the first quarter of 2012. Total revenues for the Group increased 5.3% year-over-year to €7.39 billion due to growth in Brazil and Argentina, which offset declines in Italy. EBITDA was up slightly at €2.97 billion. The presentation focused on progress in the domestic Italian market, where revenues declined 2.4% and EBITDA declined 3.4% due to continued declines in fixed line revenues, and on the Group's UBB fiber broadband strategy.
Executive aviation embraer day 2010 10_29Embraer RI
This presentation by Embraer Executive Vice President Luís Carlos Affonso provides an overview of Embraer's executive jet business. It discusses Embraer's current and future product lines including the Phenom 100, Phenom 300, Legacy 450, Legacy 500, Legacy 600, Legacy 650, and Lineage 1000. It also reviews Embraer's customer support services and network. The presentation provides Embraer's guidance for 2010, delivering 120 executive jets and generating $1.1 billion in revenue, and discusses Embraer's new facility in Melbourne, Florida.
This document provides a semi-annual update on the performance of Fairfield Sentry Limited (Sentry), a fund that uses a strategy called a split strike conversion to invest in the S&P 100 index. In the second half of 2007 and January 2008, Sentry delivered returns of 3.21% and 0.63% respectively, outperforming the S&P 100 index despite market turbulence. Sentry's strategy aims to match the return of the index with lower volatility by alternating between exposure to the index through options and holding cash.
The document summarizes Antonio Marti's presentation at the 10th Annual European & EMEA Telecommunications Conference in 2010. It discusses Telefonica Espana's 2009 results, highlighting a focus on cash flow generation and improving revenue trends in the second half of 2009. It also looks ahead, noting the impact of external factors and Telefonica's priorities. The results showed declining revenues but increased efficiency, with a focus on further developing data, IT, and new revenue sources.
1) The European sovereign debt crisis remains uncontained, with fiscal burdens increasing across many eurozone countries and further sharp fiscal consolidation still required.
2) While the ECB has taken measures to improve bank lending and reduce bond yields, credit conditions are still tightening and bond yields remain elevated in troubled countries.
3) The eurozone faces the risk of a broader crisis scenario that could significantly slow growth across the region and leave Greece and Portugal stuck in deep recessions for years.
The document summarizes recent economic data and indicators from Thailand in November and December. Key points include:
- Economic indicators in November showed signs of continued growth compared to October, with increases in private consumption and investment. Exports and tourism also grew despite a stronger baht.
- Manufacturing production growth slowed slightly but business confidence rose.
- Inflation rates picked up in line with economic growth, with headline inflation rising to 3.0% and core inflation higher than expected at 1.4%.
- Private investment remained strong while the business sector was slightly more optimistic about the economic outlook.
O documento discute os tipos de discriminação, incluindo discriminação racial, social e religiosa. A discriminação ocorre quando há um tratamento adverso baseado em características como raça, gênero, orientação sexual ou religião. Isso viola os direitos humanos e prejudica as pessoas social, cultural ou economicamente. A discriminação é proibida na maioria dos países e pode levar a problemas legais.
This document discusses the importance of storytelling for marketing and connecting with customers. It argues that people do not always listen or behave as expected because marketers do not understand their customers' perspectives. It then provides examples of using small, simple stories as well as metaphors, archetypes, and story arcs to help make brands more meaningful and relevant to customers. The document advocates employing both left and right brain tactics to tap into well-known story structures that audiences can relate to as part of an effective brand storytelling strategy.
The document summarizes AkzoNobel's Q4 and full year 2010 results. Key highlights include 12% revenue growth in 2010 to €14.6 billion, with EBITDA up 16% to €1.96 billion. Revenue growth was driven by 6% volume increase and 6% price increases. Decorative Paints revenue grew 9% in 2010 and Performance Coatings revenue increased 16%. The CEO outlined medium-term strategic goals including growing revenue to €20 billion and maintaining a 13-15% EBITDA margin.
The document is a presentation by Mark Stromberg from Gartner that discusses the economic outlook for 2009 and the semiconductor industry. It provides forecasts showing steep declines in GDP, electronics spending, semiconductor revenue, and other metrics in 2009 due to the recession. It also discusses signs that would indicate recovery, such as a return to GDP growth in the US in the third quarter of 2009. The presentation outlines waves of recovery expected across different device application sectors from 2009 to 2011 if GDP growth returns in the third quarter of 2009.
The document is a weekly market perspectives report from Fincor- Sociedade Corretora, S.A. dated September 10th, 2012. It provides a summary of recent economic events and data in Europe and the US, as well as previews of key events and data expected for the coming week. Specifically, it discusses the ECB's new bond-buying program, weak economic data from Europe and the US, expectations for further monetary easing from the Fed, and suggests buying shares of the Portuguese bank BES.
The document summarizes key points from a lecture on sources of future economic growth in the UK:
1) The UK experienced a deep recession from 2008-2009 but recovery has been "V-shaped", similar to recessions in the early 1980s.
2) The government's austerity program aims to reduce the deficit significantly by 2015-2016 but front-loading cuts in 2011-2012 risks slowing the recovery.
3) The recession may have caused permanent loss of output and reduced the trend growth rate to about 2%, down from past averages, due to issues like long-term unemployment and reduced business investment.
This document provides a European Economic Forecast for winter 2013. It summarizes the economic outlook for the European Union and individual member states. The EU economy is gradually overcoming headwinds, but risks remain. Growth is expected to remain weak across most member states, with net exports being the main driver of growth for some countries. Unemployment rates are projected to remain high or continue rising in many EU countries.
Presentation, Economic Outlook for 2013 and Beyond, presented by Michael Brown, Wells Fargo Securities, presented at Winter 2012 NCLGBA Conference, 12/7/12
This document discusses government debt and fiscal deficits in Central and Eastern European (CEE) countries compared to other parts of Europe and the US. The key points are:
1) Public debt levels in CEE countries are generally lower than the Eurozone average, with most below 60% of GDP except for Hungary which is below the average at 77% of GDP.
2) Foreign ownership of government bonds is relatively low in CEE countries, around a quarter of debt on average compared to two thirds in Greece.
3) While budget consolidation is important, growth rates in the CEE region are above developed markets so deficits differ, with lower deficits where growth is higher.
SANTANDER CONSUMER FINANCE-SANTANDER INVESTOR DAY 2011BANCO SANTANDER
Santander Consumer Finance se mueve en niveles récord de beneficios en 2011 y continuará haciéndolo en 2012 y 2013. Presentación Magda Salarich. Santander Investor Day 2011
Merrill Lynch Global Telco and Media Conference - Marco Patuano presentation ...Gruppo TIM
Telecom Italia provided an update on its performance in the first quarter of 2012. Total revenues for the Group increased 5.3% year-over-year to €7.39 billion due to growth in Brazil and Argentina, which offset declines in Italy. EBITDA was up slightly at €2.97 billion. The presentation focused on progress in the domestic Italian market, where revenues declined 2.4% and EBITDA declined 3.4% due to continued declines in fixed line revenues, and on the Group's UBB fiber broadband strategy.
Executive aviation embraer day 2010 10_29Embraer RI
This presentation by Embraer Executive Vice President Luís Carlos Affonso provides an overview of Embraer's executive jet business. It discusses Embraer's current and future product lines including the Phenom 100, Phenom 300, Legacy 450, Legacy 500, Legacy 600, Legacy 650, and Lineage 1000. It also reviews Embraer's customer support services and network. The presentation provides Embraer's guidance for 2010, delivering 120 executive jets and generating $1.1 billion in revenue, and discusses Embraer's new facility in Melbourne, Florida.
This document provides a semi-annual update on the performance of Fairfield Sentry Limited (Sentry), a fund that uses a strategy called a split strike conversion to invest in the S&P 100 index. In the second half of 2007 and January 2008, Sentry delivered returns of 3.21% and 0.63% respectively, outperforming the S&P 100 index despite market turbulence. Sentry's strategy aims to match the return of the index with lower volatility by alternating between exposure to the index through options and holding cash.
The document summarizes Antonio Marti's presentation at the 10th Annual European & EMEA Telecommunications Conference in 2010. It discusses Telefonica Espana's 2009 results, highlighting a focus on cash flow generation and improving revenue trends in the second half of 2009. It also looks ahead, noting the impact of external factors and Telefonica's priorities. The results showed declining revenues but increased efficiency, with a focus on further developing data, IT, and new revenue sources.
1) The European sovereign debt crisis remains uncontained, with fiscal burdens increasing across many eurozone countries and further sharp fiscal consolidation still required.
2) While the ECB has taken measures to improve bank lending and reduce bond yields, credit conditions are still tightening and bond yields remain elevated in troubled countries.
3) The eurozone faces the risk of a broader crisis scenario that could significantly slow growth across the region and leave Greece and Portugal stuck in deep recessions for years.
The document summarizes recent economic data and indicators from Thailand in November and December. Key points include:
- Economic indicators in November showed signs of continued growth compared to October, with increases in private consumption and investment. Exports and tourism also grew despite a stronger baht.
- Manufacturing production growth slowed slightly but business confidence rose.
- Inflation rates picked up in line with economic growth, with headline inflation rising to 3.0% and core inflation higher than expected at 1.4%.
- Private investment remained strong while the business sector was slightly more optimistic about the economic outlook.
O documento discute os tipos de discriminação, incluindo discriminação racial, social e religiosa. A discriminação ocorre quando há um tratamento adverso baseado em características como raça, gênero, orientação sexual ou religião. Isso viola os direitos humanos e prejudica as pessoas social, cultural ou economicamente. A discriminação é proibida na maioria dos países e pode levar a problemas legais.
This document discusses the importance of storytelling for marketing and connecting with customers. It argues that people do not always listen or behave as expected because marketers do not understand their customers' perspectives. It then provides examples of using small, simple stories as well as metaphors, archetypes, and story arcs to help make brands more meaningful and relevant to customers. The document advocates employing both left and right brain tactics to tap into well-known story structures that audiences can relate to as part of an effective brand storytelling strategy.
The Thai economy grew more slowly than expected in the third quarter of 2011, expanding just 0.5% quarter-over-quarter and 3.5% year-over-year. Private investment and exports continued to drive growth, but agricultural output declined due to floods. Household consumption growth also slowed as consumers became more cautious due to flooding. The economy is expected to grow only 1.5% for the full year due to flooding impacts. The Bank of Thailand is expected to cut interest rates by 50 basis points to boost the economy and restore confidence.
The document provides a summary and analysis of economic conditions in Thailand and other regions. It discusses:
1) Continued concerns about the eurozone debt crisis fueling demand for safe-haven currencies like the US dollar and depressing risk assets.
2) While US money supply growth looks better than the EU or Japan, high unemployment will likely lead the Fed to resume quantitative easing in mid-2012.
3) Local authorities in Thailand face challenges from losses at the Fiscal Debt Fund and risks of bond yield curve steepening given planned large bond issuances.
4) The analysis predicts the Bank of Thailand will cut its policy rate again in January and forecasts Thailand's economy could experience a V-shaped
This document discusses how storytelling can be used for marketing and connecting with customers. It recommends using small, simple stories that customers can relate to. It also suggests employing techniques like metaphors, archetypes, and story arcs that tap into common narratives. The goal is to create meaningful and relevant stories that spread through word-of-mouth and engage customers at a deep level.
SEB Research: IMF leads enlarged rescue package for GreeceSEBgroup
SEb's analysts see a large and credible IMF package as the most likely scenario to resolve the Greek debt issue. This is also what is needed to calm markets. Recent comments from EU officials also rules out debt restructuring for Greece. According to SEB's experts a proposal must be presented within coming days to calm financial and political nervousness.
1) Portugal's debt problems stem from rigid product and labor market regulations that have led to declining productivity and competitiveness.
2) While political risks are lower than other troubled European countries, more time is needed to restore Portugal's economy as significant reforms have been implemented.
3) The IMF assesses that existing financial assistance for Portugal is adequate, but risks remain and additional funds from Europe may be needed, though funds are available.
The document provides an economic analysis and outlook from the Chief Economist of a bank. It summarizes data on GDP growth in Canada and the US, food and commodity price inflation, the economic outlook and recession risks for European economies, challenges for the banking sector in Europe, fiscal policy debates in the US, US consumer behavior, monetary policy outlook from the Fed, and the US housing market. The analysis covers economic indicators and policy issues across multiple countries and regions.
Fincor- Sociedade Corretora, S.A. provides brokerage services including receiving, executing, and transmitting orders, but the document does not constitute investment advice. Germany's constitutional court approved further funding for the ESM bailout fund up to €190 billion, requiring parliamentary approval for higher amounts. Greece needs to implement additional austerity measures of €11.5 billion to receive further aid from the Troika.
- The document is a research report by Mediobanca Securities that recommends an "Outperform" rating for shares of Unicredit, an Italian bank, with a target price of €9.10 per share.
- The report cites Unicredit's restructuring efforts in Italy and upcoming restructuring in Germany and Austria as positioning it well to benefit from trends like ECB quantitative easing and Eurozone economic recovery.
- Normalization of loan loss provisions and net interest margin are expected to boost profits and return on equity by 6 percentage points according to the report's estimates.
The document provides an economic and market summary for November 2012 and December outlook:
1) In November, European equities were positive while Japanese indices rose on weakening of the yen. The S&P 500 was flat as investors watched the US fiscal negotiations. Portuguese and Spanish bonds advanced on the Greece deal.
2) Data shows the Eurozone economy remains in recession while the US and China have remained resilient. Political decisions around fiscal cliffs and budgets will drive markets in December.
3) China's manufacturing PMI rose to 50.6 in November, pointing to a modest recovery continuing. Housing is a positive in the US but business investment is a concern. The Eurozone outlook remains challenging with southern Europe
- The document analyzes the economic situation in the Eurozone, with a focus on issues like the risks facing the currency union, the sluggish economic recovery, and concerns around Spain's growth outlook.
- It argues that while a breakup of the Eurozone would threaten another Great Depression, current proposals only address symptoms rather than underlying issues and a long-term political solution is needed.
- Spain has managed to differentiate itself from other peripheral economies, but its growth outlook remains clouded by weak global demand, and adhering to its fiscal consolidation plan is paramount.
Fincor- Sociedade Corretora, S.A. provides brokerage services including receiving, executing, and transmitting orders. The document does not constitute investment advice or a recommendation and Fincor will not accept responsibility for any use of or effects from the content.
Risk Management - The Role of Financial Institutions in the Current Economic ...FERMA
The panel discussed the role of financial institutions in the current economic climate. They addressed:
1) How new regulations like Solvency II and Basel III will impact institutions by increasing capital requirements and costs, but potentially help reduce systemic risk. Regulations could also inadvertently reduce long-term investing and cause pro-cyclical impacts.
2) Insurers have an opportunity to finance the real economy as banks reduce lending. Solvency II may encourage long-term investing in infrastructure and SMEs if capital rules are appropriately refined. Partnering with banks also provides investment opportunities for insurers.
The document discusses the role of the International Monetary Fund (IMF) in Greece's 2015 bailout. It provides background on Greece's economic troubles since 2008 and details the multiple bailout packages provided by the IMF and European institutions between 2010-2015. The bailouts aimed to support Greece's austerity reforms but impacted citizens through wage freezes and tax increases. The IMF wanted to see debt relief for Greece and sustainable reforms before committing further funds, as Greece struggled with unsustainable debt levels over 175% of GDP.
Presentation of Prof. Lars Feld - The Economic Situation in EMU - Where do we...Bankenverband
GCEE Business Cycle Update, March 2018: “In the euro area, the level of indebtedness of many member states remains very high. This is particularly true of Italy where the national debt stands at over 130 % of GDP. Should financial markets lose confidence in the sustainability of public debt on account of the political uncertainty resulting from the outcome of the election, given the size of the Italian economy a return of the euro crisis cannot be ruled out. Furthermore, risks to financial stability continue to persist in certain member states due to the fragility of many banks, particularly with regard to the extent of non-performing loans.”
This document discusses the state of the European economy and issues that need to be addressed for continued recovery and structural progress. It notes that while economic expansion is ongoing, additional reforms are still needed to boost potential growth rates. It also emphasizes that monetary policy accommodation remains important to support inflation reaching its target and avoid "lower for longer" inflation, but that fiscal and structural policy actions are also warranted to share the burden with monetary policy. Overall it calls for coordinated efforts across these policy areas to take advantage of the current opportunity for growth while also remaining vigilant about financial stability risks.
The debt crisis began in Greece in late 2009 when the new government revealed the budget deficit was much higher than previously reported. This undermined market confidence in Greece and caused borrowing rates to rise sharply. The crisis spread to other European nations like Portugal, Ireland, Spain and Italy who had taken on large debts. A bailout package was created by the IMF and Eurozone nations to help Greece, but long term solutions are still needed to restore confidence and prevent the crisis from worsening or spreading further. National austerity measures are being implemented but more fiscal coordination between European states may be required to contain the problem.
This document discusses the economic outlook for the Euro Area in 2018 and analyzes key issues:
1. Economic activity is expected to remain strong but structural reforms are needed to boost potential growth rates.
2. Inflation is forecast to remain below target over the next few years despite a closed output gap. The Phillips curve relationship between inflation and unemployment seems stable.
3. Monetary policy accommodation may still be needed given inflation outlook and signs of residual financial market fragmentation, though private and public debt levels pose risks to financial stability in some countries like France. Coordinated fiscal and structural reforms could help sustain the expansion without overburdening monetary policy.
Perspectivas Semanais de Mercado Fincor- Semana 15 OutubroJoão Pinto
The document provides a weekly summary of markets and economic perspectives. It discusses weakness in equity markets following the Fed's QE3 announcement, earnings reports from major banks like JPMorgan and Citigroup, and downward revisions to global growth forecasts by the IMF. Other topics covered include industrial production in the Eurozone, China's exports, US consumer confidence reaching a 5-year high, and monetary policy decisions from central banks in Brazil, South Korea, Turkey and Japan.
The document provides an overview of recent developments in global financial markets and the world economy. Key points include:
1) Equity markets showed weakness in the past 4 weeks after the announcement of QE3, while bank stocks sold off on mixed earnings reports.
2) The IMF cut its global growth forecasts and warned of downside risks from fiscal issues in the US and a possible slowdown in China. Growth is expected to remain sluggish.
3) S&P downgraded Spain's credit rating to BBB- with a negative outlook, citing risks to growth and budget targets. Moody's is expected to announce a rating action on Spain this month.
Portugal, greece and the euro crisis what the news areMarkets Beyond
Portugal is under increasing stress after the rejection of a third austerity plan by its Parliament.
Greece's budget deficit reduction is not starting well in 2011, and the latest figures smell manipulation (with the EU blessing)
This document provides a summary and analysis of recent updates from the European Central Bank (ECB) regarding their quantitative easing (QE) program and targeted longer-term refinancing operations (TLTRO). It finds that most eurozone countries have already met lending benchmarks to receive TLTRO funds at low rates, suggesting upcoming TLTRO allotments could see high demand. It also notes the ECB may gradually reduce monthly QE purchases and shift more toward supranational agency bonds as some countries approach the 33% issuer limit. Overall trades suggested include long positions in euro swap rates and select sovereign debt markets.
Similar to K bank capital market perspectives jul 22 greece (20)
KBank Capital Market perspectives May 18 markets wrap up - positioning for ...KBank Fx Dealing Room
Global markets are experiencing renewed volatility due to concerns about the future of the eurozone and slowing economic growth. Investors have sold risky assets like stocks and bought safe-haven assets such as the U.S. dollar, Japanese yen, U.S. treasuries and German bunds. The U.S. dollar has strengthened about 8% against other major currencies over the past year. Asian currencies have also weakened against the dollar, with the Thai baht declining about 2%.
1) A parliamentary election in Greece failed to form a new government, increasing the risk of Greece defaulting on its debt obligations or leaving the eurozone.
2) If Greece stops implementing austerity measures required for its bailouts, it will have no choice but to default, as it will have no incoming or outgoing funds. This will be a showdown between Greece's new leader and European creditors.
3) During the period of uncertainty until the next election, volatility in currency markets like the USD/THB will likely rise. However, the eurozone will ultimately take steps to keep Greece in the eurozone and inject more liquidity, reducing volatility once a solution is reached.
The document provides a summary of movements in various financial markets and commodities over the past quarter. It notes that the USD/THB remained in a sideways channel tracking EUR and gold. The EUR/USD was rangebound between 1.3000-1.3400 with focus on Spain. The USDJPY strengthened from 84 to 81 after the BoJ signaled no further easing but the market expects more bond purchases. The THB interest rate swap rose in Q1 on improved sentiment in Europe. NYMEX crude oil remained in an uptrend channel between $100-110. Coal prices continued to drop due to oversupply of the cheaper substitute, natural gas. Rubber rebounded in Q1 but
The document provides a summary of movements in various financial markets and commodities over the past quarter. It notes that the USD/THB remained in a sideways trend influenced by EUR and gold movements. The EUR/USD traded in a narrow range of 1.3000-1.3400 with focus on Spain. The USDJPY strengthened from 84 to 81 after the BoJ signaled no further easing but the market expects more bond purchases. THB interest rate swaps rose in Q1 on improved sentiment in Europe and comments from Thailand's central bank. NYMEX crude oil remained in an uptrend channel between $100-110. Coal prices continued to drop due to oversupply of the cheaper substitute,
- The Federal Reserve decided to keep the target range for the Federal Funds rate at 0-0.25%, as it has since December 2008, and expects to maintain this accommodative stance through late 2014.
- While the economy has been expanding moderately and unemployment has declined, the Fed judges that conditions still warrant exceptionally low interest rates.
- Inflation has picked up due to higher oil and gas prices but core inflation remains stable, and the Fed expects inflation to remain at or below its target in the medium term.
- The Fed will continue its program to extend the average maturity of its securities holdings and is prepared to adjust the size and composition of holdings as needed.
- Thai economic indicators showed broad-based improvement in January from the impacts of flooding in 2011, but growth remains below pre-flood levels. Private consumption and investments increased.
- Manufacturing production continued rising as supply chain issues ease, though export-dependent sectors saw slower growth. Inflation declined further.
- The document discusses risks from higher oil prices and the ongoing European debt crisis, as well as positive factors like the risky asset rally and additional European funding measures.
Thailand has been placed on FATF's watch list due to a lack of progress in fighting money laundering and terrorism financing. FATF noted that Thailand has not fully implemented its action plan to address deficiencies, including adequately criminalizing terrorist financing and strengthening anti-money laundering supervision. Being placed on the watch list means fund transfers involving Thailand will face higher scrutiny and could lead to economic sanctions if issues are not addressed. As FATF members account for 83% of the global economy, sanctions would significantly impact Thailand. Thai authorities must now comply with FATF's recommendations to avoid further consequences.
§ Thai GDP dropped 9.0% year-over-year in the fourth quarter of 2011 due to declines in domestic and external demand from severe flooding, much less than forecasts.
§ The floods resulted in decreases in private consumption, government spending, investment and exports while imports also dropped.
§ For 2011, Thai GDP growth was only 0.1%, far below previous forecasts, due to the flooding impact.
§ NESDB expects Thai GDP growth to recover to 5.5-6.5% in 2012 as investment increases, though exports growth was forecast lower, and inflation is projected at 3.5-4.0%.
The document provides a market movement update for February 2012, summarizing trends in currency exchange rates and commodity prices over various time periods. It notes that the USD/THB spot rate has fallen over 22% since 2007 but only 7% since 2011. Other currency pairs and commodity prices such as oil, gold, and copper are also discussed. The document concludes by highlighting opportunities for cheap baht funding through currency swaps and recommending options hedging strategies.
The document provides a summary and analysis of economic conditions in Thailand and other regions. It discusses:
1) Continued concerns about the eurozone debt crisis fueling demand for safe-haven currencies like the US dollar and depressing risk assets.
2) While US money supply growth looks better than the EU or Japan, high unemployment will likely lead the Fed to resume quantitative easing in mid-2012.
3) Local authorities in Thailand face challenges from losses at the Fiscal Debt Fund and risks of bond yield curve steepening given planned large bond issuances.
4) The analysis predicts the Bank of Thailand will cut its policy rate again in January and forecasts Thailand's economy could experience a V-shaped
This document provides an economic update on Thailand with data from November and December 2011. It discusses declines in the SET index, farm income, manufacturing production, private consumption, investment, exports and imports due to the European debt crisis and flooding in Thailand. Headline inflation declined to 3.53% in December as food and transportation prices fell with improved flooding conditions. Government bond yields rebounded at the end of December on news of large planned bond issuances in the coming quarters.
KBank Capital Market perspectives Dec 30 flooding and economic slowdown in n...KBank Fx Dealing Room
The Thai economy contracted sharply in November 2011 due to the severe flooding which impacted all economic sectors. Key economic indicators such as manufacturing production, exports, private consumption, and investment all declined significantly from the prior month and year. The Thai baht also weakened substantially against the US dollar in November amid the slowing global economy and flooding impacts on Thailand.
- Exports and imports in Thailand fell in November, with exports down 12.4% year-over-year and imports down 2.4%, leading to a larger trade deficit of $1.373 billion.
- The declines were due to ongoing effects of severe flooding during the quarter, which disrupted manufacturing production and supply chains. Exports of industrial goods and vehicles fell sharply.
- Weak exports will likely warrant a more dismal economic outlook, leading the Bank of Thailand to consider further interest rate cuts to support recovery. The document forecasts USD/THB volatility in the first half of 2012, with a target rate of 29.50 by year-end.
The document provides a monthly economic and foreign exchange outlook report. It discusses several topics:
1) Concerns over the Mayan calendar prophecy and global economic outlook in 2012.
2) Expectations that the US dollar will weaken and Thai baht will strengthen against the dollar in 2012.
3) Analysis showing high global debt levels could continue weighing on economic growth.
4) Charts tracking economic indicators and currency movements.
The report concludes by examining relationships between the euro/US dollar exchange rate and the US dollar/Thai baht rate. It finds the baht tends to strengthen as the euro strengthens against the dollar.
The document provides market updates on currency movements and interest rates from December 2011. It summarizes data on the EURUSD, USDTHB, crude oil, gold prices, and Thai and US interest rates. The USDTHB movement shows a narrow trading range in 2011. The document suggests the THB may weaken against the USD initially in 2012 before strengthening. It also notes the USDTHB is correlated with the SET index and EURUSD. Crude oil is forecast to trade between $75-110 per barrel in 2012. Gold support is seen at $1,500 per ounce. Soft interest rate environments are expected in Thailand and the US in the first half of 2012.
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K bank capital market perspectives jul 22 greece
1. KBank Capital Market Perspectives Market Updates
Macro / FX / Rates
Why should Germany and France save Greece?
22 July 2011
Euro-area leaders recently annouced that the eurozone and the IMF
would provide additional EUR 159bn (USD 229bn) to Greece Amonthep Chawla, Ph.D. -
Greece is seen to benefit more from staying in the eurozone than Kasikornbank
amonthep.c@kasikornbank.com
leaving it
Germany and France are likely to protect their interest by keeping
Greece inside the eurozone so as to reduce financial volatility
Thai economy will need to prepare for another round of economic
turmoil because the recent negotiation will last only temporarily
while the fundamental problems are not yet resolved.
Disclaimer: This report
must be read with the
Disclaimer on page 7
that forms part of it
Some doctors save a life of a patient by cutting off his leg
Debt crisis in the eurozone has been spreading from Greece to Ireland and Portugal.
These three countries requested financial aid from the IMF and the ECB in exchange of
their fiscal reform, which could guarantee that they could pay back loans and service their
bond interest payments. However, sluggish tax increase and spending cut has led to
series of bail-out, which deteriorate the credibility of the eurozone. Euro-area leaders
recently annouced that the eurozone and the IMF would provide additional EUR
159bn (USD 229bn) to Greece. The region is likely to increase rescue fund to other
countries that have trouble servicing their debt as well. Greece is going into “selective
default”, which includes a voluntary extension of the bond maturity and lower the bond
yields. Investors will need to accept haircut. Enormous debt in Spain and Italy triggered
the market to question the sustainability of the region. Why can’t the core countries, i.e.
Germany and France, just get rid of some bad apples before they ruin the whole basket?
Is it possible to kick Greece out of the eurozone?
Fig 1. Budget deficit to GDP Fig 2. Current account balance to GDP
% GDP % GDP
5 10
5
0
0
-5
-5
-10
-10
-15
-15
-20 -20
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10
Germany Greece Italy Spain US Germany Greece Italy Spain US
Source: Bloomberg, KBank Source: Bloomberg, KBank
Just like any other political or economic settings, the eurozone started with hope that it
will reduce price volatility, subside social instability and promote economic prosperity. As
time goes by, the eurozone is being challenged by global economic crisis as well as fiscal
solvency. It has been originally formed to coordinate regional monetary policy so as every
country uses common interest rate and currency. Meanwhile, each country maintains
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2. independence of fiscal policy. In order to avoid inconsistency between these two policies,
the eurozone members promised, as stated in the Lisbon Treaty, that they would
maintain fiscal discipline in their countries, i.e. keeping fiscal deficit under 3% of GDP and
public debt below 60% of GDP. However, significant number of members are not able to
keep their promise that they gave before joining the eurozone. There are some rules to
punish countries that do follow fiscal discipline, yet there is no rule stating that these
countries could be expelled from the group. It is understandable that they would not draft
any plan to break up the eurozone; similarly there is no part in the US constitution on the
procedure to break up the United States. On the other hand, it is possible for any country
to voluntarily withdraw from the eurozone. That means Greece could simply leave the
currency union, start its weaker national currency to gain competitiveness and solve its
economic crisis. However, Greece decided to stay regardless of several political
demonstration against the austerity measures. Meanwhile, Germany and France are
seen to try very hard to keep Greece inside the eurozone. What do Greece, France and
Germany mutually benefit from the eurozone?
Fig 3. Twin deficits Fig 4. Debt to GDP
% GDP % GDP
180
US
160
Spain 140
120
Portugal 100
Italy 80
60
Ireland 40
20
Greece
0
-35 -30 -25 -20 -15 -10 -5 0 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16
Germany Greece Ireland
Current account deficit Budget deficit Italy Portugal Spain
Source: Bloomberg, KBank Source: Bloomberg, KBank
High cost of staying
Could Greece recover from its ailing economy by leaving the eurozone? Greece lost
control of its monetary policy after it joined the eurozone in 2001. Consequently, Greece
has been using the interest rate set by the ECB to control regional price volatility, yet it is
not dependent on Greece’s labor market condition. Higher interest rate is likely to deter
labor market recovery, leading to higher unemployment rate, poverty and recession.
Further, Greece has adopted the euro as its national currency, preventing it from
changing the exchange rate to rebalance the current account deficit. Greece’s poor
export performance could have been improved by allowing the exchange rate to be
weaker against neighboring countries so as to gain competitiveness. At the same time,
Greece has to cut budget deficit and lower public debt. Greece has recently passed the
austerity measures to raise taxes and cut spendings. The plan is seen to slowly create
fiscal strength to the Greek government in expense of its citizens. Some public
employees will lose their jobs. Salaries, pensions and other public benefits will be cut.
Domestic consumption will subsequently fall, leading to an economic recession.
Privatization of state enterprises will be implemented to reduce fiscal pressure and to
gain enough capital to pay off debt, which will reduce national assets and increase
dependency on foreign companies.
22
2
3. Fig 5. Greece’s export by product 2010 Fig 6. Percent of world export
% world export
Food
6
Manufactured Goods 23%
and Articles 5
33%
4
Crude Materials ex cl
3
Fuels 2
7%
Greece's ex port by product 2010
1
Mineral Fuels
9%
0
Machinery and
1990 1994 1998 2002 2006 2010
Transport Equipment Chemicals
13% 15% Portugal Ireland Italy Greece Spain
Source: CEIC, KBank Source: World Trade Organization, KBank
From the point of view of taxpayers in France and Germany, the bail-out plans are seen
to incur losses to them, either by extending bond maturity or shifting financial burden to
investors. Costs of rescuing Greece and other indebted nations will surge, which will
trigger demonstration in the lending countries. It is likely that Greece cannot reform its
fiscal stance, then taxpayers in Germany and France could stop their government from
bailing out Greece, or even could threaten these founding countries to leave the
eurozone.
Fig 7. Current account Fig 8. Number of Visitors
16,000 0 Millions
14,000 18
-10,000 16
12,000
14
-20,000
10,000 12
8,000 -30,000 10
6,000 8
-40,000 6
4,000
-50,000 4
2,000 2
0 -60,000 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Current Account: Serv ices: Trav el (left, USD mn) Current Account (right, USD mn) Visitor Arriv als: Europe Visitor Arriv als: non-Europe
Source: CEIC, KBank Source: CEIC, KBank
Higher cost of exiting
Let’s say Greece wants to leave the eurozone, abandon the euro and revive its drachma.
Is it going to benefit Greece? For sure, Greece could gain control of its monetary policy.
Greece’s central bank could set a policy rate that is in line with its macroeconomic
conditions so as to promote employment and lower price fluctuation. Greece could set its
drachma weaker than the euro in order to gain competitiveness in exports, which will
solve its long-lasting current account deficits. Main sources of foreign income are
tourism and exports of food and vegetable product. Increase in exports and the
number of tourists from Europe will favor Greece’s economy. However, the cost of
exiting the euro could be excruciating to its economy.
First, Greece will have to re-denominate its existing euro to the national currency, which
will inevitably encounter technical difficulties. For example, banks will need to re-
denominate mortgage loans, credit card debt, bank deposit in all electronic system into
the national currency. The government will need to pass a law to re-denominate taxes,
government employees’ salary, public pension and other measurement as well. Second,
Greece will need to prevent capital flight after depositors or investors anticipate that
Greece will re-denominate their claims from the euro to the national currency. The
change to national currency is likely to reduce their asset values, which will rush people
33
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4. to take money out of Greece to other eurozone countries and lead to bank run or collapse
in Greece’s financial system. Third, financial uncertainty will lead to another round of
credit-rating downgrade, which will result in greater sovereign spreads and higher interest
costs. Higher interest costs and weakening national currency will increase the amounted
of debt, which is originally denominated in the euro. Despite gains in export
competitiveness and increase in employment, higher inflation from weakening currency
could outweigh gains in higher wage, leading to lower real income of Greek people.
Greece could implement capital control temporarily to force its citizen and investors to
surrender their euro to the new national currency. However, such policy will greater
isolate Greece economically from the region.
Why Germany and France need to help Greece? Greece’s economy is relatively small in
the eurozone. However, Germany and France are heavily exposed to Greece’s debt.
Failure to pay off debt and continual decline in the bond market prices could severely
affect the financial sector in the lending countries. Therefore, it is an act of self-interest for
Germany and France to save Greece and prevent this contagious effect to spread to
other borrowing countries.
Fig 9. Percentage of gold in foreign reserve Fig 10. Exposure of Greece’s debt by other countries
USD bn
% 60
90 383
112
80 8,134 50
3,401 2,452
70 2,435
40
60
50 30
228
40 20
30
20 10
10 109 1,054 0
0
Spain Japan Belgium Sw itzerland Italy US UK Germany France
Portugal Greece USA Germany Italy France Spain Thailand China
% of reserv es Public sector Banks&priv ate lending
Note: the numbers above the bar graph indicate tonnes of gold Source: BIS Quarterly Review June 2011, KBank
Source: World Gold Council, KBank
What’s next for Greece and the eurozone?
The latest attempt to bail out Greece and perhaps other indebted nations are likely to be
just a short-term scheme to gain confidence back to the eurozone. Greece may have
received money to pay off debt; however, it needs to generate new money to finance
interest payment as well as the principal of the debt. How can Greece generate new
money? One thing for sure is to extract income from its citizen by raising taxes and
cutting spending so as to generate budget surplus. One major difficulty is that tax
revenue will be unavoidably lower after Greece’s economy is going toward recession.
People will have lower income. Consumption will decline. Subsequently, taxes levied on
income and consumption will fall. What about privatization? Yes, Greece can earn a great
deal of revenue by selling off national property to foreign investors. However, Greece will
need to bear the consequence that it is likely to pay higher price for using the state
utilities. How about selling gold? Greece’s central bank holds a great deal of gold over
112 tonnes, or nearly USD 6bn. Greece could easily service its debt payment. What has
restrained Greece from not selling off gold? One reason is that the IMF has set a
regulation to prevent a country’s central bank to sell gold, which could intervene the gold
prices in the market. However, Greece could sell gold directly to the IMF for certain
amount. What if Greece increases its exports and boost tourism? Sure, it does sound like
a great idea, but how? Greece cannot simply lower price of its export products because
its currency is fixed by the euro. Export of food product is seen favorable as it relies less
on import of oil, capital goods and intermediary products. Food export is accounted for
about 20% of total export, yet it is unlikely to generate enough revenue.
44
4
5. In the short-run, Greece is unlikely to acquire enough money to pay off debt. Should
Greece ask for another round of bail out? Or should investors just accept haircut and
banks start to increase their capital to rebalance their balance sheet? Debt crisis in the
eurozone is likely to come back to haunt investors again in the near future. Apart from
Greece, the eurozone is full of indebted countries, which are unlikely to meet the target of
fiscal discipline set by the region. The problems of regional insolvency is likely to grow
bigger when big economies, such as Spain and Italy, annouce default. Thai economy
will need to prepare for another round of economic turmoil because the recent
negotiation will last only temporarily while the fundamental problems are not yet
resolved. The amount of international trade between Thailand and Greece or other
eurozone countries are small. However, volatility in exchange rate will affect
capital flows, which will subsequently result in an increase in the volatility of Thai
baht.
So what could be a long-term solution? One possibility is to plan for an exit strategy for
countries that could no longer integrate in the region. An exit strategy should prevent both
the exiting members and the existing members from economic crisis. Countries may be
allowed to temporarily adopt the euro as their national currency in order to insulate price
volatility during the transition until they pay off their foreign debt or regain strength to
overcome economic difficulties. Apart from looking a way to break up the eurozone,
countries in the eurozone could increase integration in fiscal policy and political
indentities so as to increase power of the central planner to solve the regional economic
problems. This could be an ideal solution to reduce diversity of the region in terms of
economic development and fiscal policy. We could experience the revival of the Roman
Empire or the European version of the United States. In such case, price volatility will
reduce, which will greater increase economic growth and international trade. Thai
economy is likely to benefit from the global economic stability as fund flows and
exchange rate will be less volatile.
55
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7. Disclaimer
For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or
sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained from sources we
believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained
herein. Further information on the securities referred to herein may be obtained upon request.
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