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| GRAFİK-2 (açıklaması haberin altında) |
Grafik 1: 1999-2011 yılları arasında Eurozone ülkelerinin cari açığı. Gri Almanya, Çizgili Fransa, kırmızı Hollanda, açık mavi İtalya ve koyu mavi Yunanistan-İrlanda-Portekiz birlikte
Grafik 2: Almanya ve Fransa bankalarının Yunanistan, İtalya ve Portekiz'deki riskleri
Why The Core Is
Also To Blame For The Euro Crisis
are quick to point at the South for
destructive habits, overspending, tax evasion, you nam it.
However, Northerners are as much of the
problem as they are the solution.
Germany, in particular, has benefited from
an abnormally low exchange rate given the scale of its economic growth in the
last ten years, according to a report authored by current Citi economist and
former FOMC economist Nathan Sheets.
Here's an excerpt from his analysis:
We conclude that both the weaker real
exchange rate associated with monetary union and the flexibility of the German
export sector in meeting rising emerging market demand have played an important
role in the sustained expansion of Germany’s trade balances. Our estimates
suggest that in the absence of these two effects, Germany’s real trade
balance would have remained in small surplus,as was the case in the years
before the introduction of the euro. The nominal balance would have
swung into slight deficit, reflecting a deterioration in the terms of trade in
line with the secular increase in the relative price of commodities; for
example, the energy import bill increased from 1.3 percent of GDP in the second
half of the 1990s to 3.8 percent of GDP on average since 2005.
Citigroup Global Markets
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As the chart above shows, even France saw
a current account surplus from 1999 through 2005. However, it is worth noting
that this trend has reversed for France in the last five years, and that net
exports have only grown by 40 percent since 1999 in comparison to explosive
German export growth of 100 percent. Greek exports grew by just 30 percent in
the same time period.
Together this investment amounted to
approximately 39% of Greek GDP, 36% of Italian GDP, and 38% of Portuguese GDP
(GDP from 2010 IMF estimates). That's a remarkably high level of investment in
countries with slow growth, large, corrupt governments, and rampant tax
evasion.
But most importantly, Germany and France
were the first and biggest offenders to the Stability and Growth Pact, the
regulations that were supposed to keep eurozone countries' spending in line
under 3% on a yearly basis. Had this pact been followed, it arguably could have
kept Greece, Portugal, and Ireland from amassing such large public debts
Economist and London School of Economics
Professor Stefan Collignon argued in January 2004 that this violation effectively
killed the Pact:
What appeared so shocking about the
events in 2003 was the fact that the decision to not follow the Excessive
Deficit Procedure was taken so early in the Pact’s life and as
a consequence of bullying by the two largest member states and without
genuine economic reasons. In other words, the procedures of the Pact have
never been fully applied.
In reality, Germany (and to a lesser
extent France) have not only benefited tremendously from the low exchange rate
and current account imbalances offered by the inclusion of poorer peripheral
states in the euro currency, by rendering the Stability and Growth pack
ineffective in 2003 they discredited the very regulations meant to prevent
imprudent spending. Whether it goes quietly or kicking and screaming, Germany
will eventually have to pay for this transgression. And that's not
"unfair."
