Europa hat in der Krise schon viele Prinzipien über Bord geworfen und dafür Kritik eingesteckt. Euroländer dürfen nicht für die Schulden von anderen gerade stehen. Oder die EZB darf keine Staatsanleihen kaufen. Diese Prinzipien gibt es nicht mehr. Fordert die Krise jetzt ein neues Opfer? Die einheitliche Geldpolitik?
Die EZB hat jahrelang gepredigt, dass sie sich nicht am Schicksal einzelner Euro-Länder orientiert, sondern nur an Entwicklungen des gesamten Euroraums. Diese Zeiten sind vorbei. Spätestens seit der Sitzung vom letzten Donnerstag heißt es nicht mehr “one-size-fits-all”, sondern “many-sizes-for-all”. Der jetzige Aufschwung macht deutlich, dass es diesen gesamten Euroraum im Augenblick nicht gibt. Während die Kernländer der Währungsunion, angeführt von Deutschland, auf dem guten Weg zu einem selbst-tragenden Aufschwung sind, hinkt die Euro-Peripherie deutlich hinterher. An diesem Bild wird sich auch so schnell nichts ändern. Haushaltskonsolidierung und Strukturreformen werden noch ein Weile eine Wachstumsbremse für Länder der Euro-Peripherie sein.
Die EZB muss diese Entwicklung tolerieren. Nur so findet der Euroraum zu einem neuen Gleichgewicht. Die EZB wird nicht noch mal so schnell auf deutsche Lohnabschlüsse reagieren wie noch 2008. Die ganze Aufmerksamkeit der EZB geht darum jetzt zu den Schwachstellen des Euroraums. Neben den Wachstumsunterschieden ist das, trotz erfolgreichem Stresstest im Juli, das Finanzsystem. Vor allem Banken aus Ländern am Rande des Euroraums hängen noch immer am Tropf der EZB. Ob sie will oder nicht, die EZB kann die unbegrenzte Liquiditätsversorgung für die Banken noch nicht zurückdrehen. Es wäre eine Gefahr für das Finanzsystem und den Aufschwung. Darum kündigte EZB Präsident Trichet am Donnerstag an, Banken bis auf weiteres so viel Geld leihen, wie sie wollen.
Die EZB tut gut daran, sich im Augenblick mehr den Schwachstellen des Euroraums zu widmen als deutschen Inflationsgespenstern hinterherzujagen. Pragmatismus statt Prinzipien.
Dit stuk verscheen eerder in het Duitse weekblad "Euro am Sonntag".
Sunday, September 5, 2010
Thursday, September 2, 2010
ECB postpone exit once again
Despite upward revisions to the growth forecasts, ECB president Trichet tried to strike a cautious note in today’s meeting. As expected, rates remained on hold. As also expected, with thanks to Bundesbank president Weber, the ECB today announced an extension of its liquidity measures with full allotment until early next year. As a consequence, liquidity provision will remain ample, a next exit attempt will at the earliest only start in the first quarter of next year and rate hikes are still a distant future.
As regards the ECB’s assessment of the economy, ECB president Trichet tried to send a two-sided message. On the one side, the ECB sees a “positive underlying momentum” in the Eurozone economy since the recovery started and the ECB’s staff projections were significantly revised upwards. For 2010, the ECB now expects GDP growth of 1.6%, from 1.0% in June. For 2011, GDP growth is now expected at 1.4%, from 1.2%. On the other side, Trichet stressed prevailing uncertainty and even cautioned against too much optimism. In the Governing Council’s view, risks to the latest staff projections were slightly tilted to the downside.
As regards inflation, Trichet reiterated the almost traditional distinction between headline inflation and domestic price pressures. While strong global growth and energy prices could still lead to higher headline inflation, the ECB expects domestic price pressure to remain low. In the latest ECB staff projections, headline inflation is expected to come in at 1.6% in 2010, from 1.5% in June, and at 1.7% in 2011, from 1.6%.
While the ECB’s macro assessment did not bring any surprises and can be summarised as “a gradual sub-potential recovery without risks to price stability”, the ECB presented the official postponement of its liquidity exit. As expected, the ECB will provide unlimited liquidity until the first quarter of 2011. One-week and one-month refinancing operations will be offered at full allotment at least until 18 January 2011. Full allotment will also be applied to the monthly 3-month LTROs until the end of the year. Last but not least, the ECB will also carry out three fine-tuning operations on 30 September, 11 November and 23 December to smoothen out the expiring 6-month and 12-month refinancing operations. These measures are too big to only tackle the end-of-the-year problem for banks. They show that, despite the positive stress tests in July, the ECB is still concerned about the health of the financial system.
All in all, after Axel Weber’s comments almost two weeks ago, today’s meeting was almost predetermined to become a damp squib. Even the extension of the liquidity measures did not come as a surprise anymore. Today’s meeting and particularly the decision on the liquidity programme shows that the ECB still does not trust the recovery and the health of the financial system. The attempt to enter the exit lane has once again been postponed.
As regards the ECB’s assessment of the economy, ECB president Trichet tried to send a two-sided message. On the one side, the ECB sees a “positive underlying momentum” in the Eurozone economy since the recovery started and the ECB’s staff projections were significantly revised upwards. For 2010, the ECB now expects GDP growth of 1.6%, from 1.0% in June. For 2011, GDP growth is now expected at 1.4%, from 1.2%. On the other side, Trichet stressed prevailing uncertainty and even cautioned against too much optimism. In the Governing Council’s view, risks to the latest staff projections were slightly tilted to the downside.
As regards inflation, Trichet reiterated the almost traditional distinction between headline inflation and domestic price pressures. While strong global growth and energy prices could still lead to higher headline inflation, the ECB expects domestic price pressure to remain low. In the latest ECB staff projections, headline inflation is expected to come in at 1.6% in 2010, from 1.5% in June, and at 1.7% in 2011, from 1.6%.
While the ECB’s macro assessment did not bring any surprises and can be summarised as “a gradual sub-potential recovery without risks to price stability”, the ECB presented the official postponement of its liquidity exit. As expected, the ECB will provide unlimited liquidity until the first quarter of 2011. One-week and one-month refinancing operations will be offered at full allotment at least until 18 January 2011. Full allotment will also be applied to the monthly 3-month LTROs until the end of the year. Last but not least, the ECB will also carry out three fine-tuning operations on 30 September, 11 November and 23 December to smoothen out the expiring 6-month and 12-month refinancing operations. These measures are too big to only tackle the end-of-the-year problem for banks. They show that, despite the positive stress tests in July, the ECB is still concerned about the health of the financial system.
All in all, after Axel Weber’s comments almost two weeks ago, today’s meeting was almost predetermined to become a damp squib. Even the extension of the liquidity measures did not come as a surprise anymore. Today’s meeting and particularly the decision on the liquidity programme shows that the ECB still does not trust the recovery and the health of the financial system. The attempt to enter the exit lane has once again been postponed.
Thursday, August 26, 2010
Unstoppable?
While many market participants are currently debating the chances of a double dip and a global slowdown, German businesses are still gaining confidence. In August, the headline Ifo index increased to 106.7, from 106.2 in July; its highest level since June 2007. The current assessment continued its recent upward trend and increased to 108.2, from 106.8. At the same time, the expectations component dropped slightly to 105.2, from 105.5, but remains far above its historical average.
After impressive second quarter growth, it does not need a rocket scientist to come up with a 2010 growth forecast of around 3% for the German economy. At present, such a forecast seems to be rather cautious. Even if the economy was to stagnate in the second half of the year, GDP growth would already amount to 2.8% over the entire year. And stagnation does not seem likely. On the contrary, order books are still filling and there is anecdotal evidence of increasing backlogs and labour bottlenecks. Call this a luxury problem. Any future slowdown in global trade would take a while before it actually hit German industrial production. For the time being and for rest of the year, just processing the received orders could be enough to bring annual GDP growth to levels hardly seen since reunification.
Today’s Ifo index reflects untarnished confidence and bodes very well for near-term growth prospects. It might not be a new German “Wirtschaftswunder”, yet, and second quarter growth will remain exceptional. However, even with an inevitable shift into a lower gear in the second half of the year, the Eurozone’s growth engine will continue to run smoothly.
After impressive second quarter growth, it does not need a rocket scientist to come up with a 2010 growth forecast of around 3% for the German economy. At present, such a forecast seems to be rather cautious. Even if the economy was to stagnate in the second half of the year, GDP growth would already amount to 2.8% over the entire year. And stagnation does not seem likely. On the contrary, order books are still filling and there is anecdotal evidence of increasing backlogs and labour bottlenecks. Call this a luxury problem. Any future slowdown in global trade would take a while before it actually hit German industrial production. For the time being and for rest of the year, just processing the received orders could be enough to bring annual GDP growth to levels hardly seen since reunification.
Today’s Ifo index reflects untarnished confidence and bodes very well for near-term growth prospects. It might not be a new German “Wirtschaftswunder”, yet, and second quarter growth will remain exceptional. However, even with an inevitable shift into a lower gear in the second half of the year, the Eurozone’s growth engine will continue to run smoothly.
Friday, August 13, 2010
Crisis? What crisis?
According to a first Eurostat estimate, real GDP in the Eurozone increased by 1.0%QoQ in Q2 2010, from 0.2% in Q1. This is the strongest growth rate since Q1 2008. No components are available yet, but exports, investments and a catching up of the construction sector after a harsh winter should have been the main growth drivers.
Turning to the available country data, the recovery has gained traction in almost all Eurozone countries. Only Greece still experienced a sharp growth decline with a drop of 1.5% QoQ. All other countries have left recession, with Spain (0.2% QoQ) and Portugal (0.2% QoQ) still lagging behind. Core Eurozone countries were the best growth performers in the second quarter, led by Germany (2.2%), the Netherlands (0.9%), Austria (0.9%), Belgium (0.7%) and France (0.6%).
Today’s numbers are a clear sign that the Eurozone has coped with the sovereign debt crisis better than expected. Of course, the Eurozone growth story is still pretty much a German export story. Although several other core Eurozone countries also showed promising developments, it is too early to become overly enthusiastic. In particular, the Southern Eurozone countries are not yet out of the woods. Fiscal consolidation and structural reforms will first weigh on growth before they can become growth-supporting.
After three difficult months of Eurozone battering, today’s numbers will help to heal the Eurozone’s wounds. For the first time since Q2 2009, the Eurozone outpaced the US economy. However, one should not get carried away by emerging decoupling dreams. The last 40 years have shown that Eurozone decoupling from the US economy has always been an illusion. At best, only the Eurozone’s current main attraction, the German economy, has the potential to start a period of growth outperformance.
Turning to the available country data, the recovery has gained traction in almost all Eurozone countries. Only Greece still experienced a sharp growth decline with a drop of 1.5% QoQ. All other countries have left recession, with Spain (0.2% QoQ) and Portugal (0.2% QoQ) still lagging behind. Core Eurozone countries were the best growth performers in the second quarter, led by Germany (2.2%), the Netherlands (0.9%), Austria (0.9%), Belgium (0.7%) and France (0.6%).
Today’s numbers are a clear sign that the Eurozone has coped with the sovereign debt crisis better than expected. Of course, the Eurozone growth story is still pretty much a German export story. Although several other core Eurozone countries also showed promising developments, it is too early to become overly enthusiastic. In particular, the Southern Eurozone countries are not yet out of the woods. Fiscal consolidation and structural reforms will first weigh on growth before they can become growth-supporting.
After three difficult months of Eurozone battering, today’s numbers will help to heal the Eurozone’s wounds. For the first time since Q2 2009, the Eurozone outpaced the US economy. However, one should not get carried away by emerging decoupling dreams. The last 40 years have shown that Eurozone decoupling from the US economy has always been an illusion. At best, only the Eurozone’s current main attraction, the German economy, has the potential to start a period of growth outperformance.
Playing in a league of its own
Today’s first estimate of German GDP growth in the second quarter confirmed an excellent growth performance. According to the first estimate by the German agency for statistics, the German economy grew by an impressive 2.2% QoQ in Q2 2010. This is the strongest quarterly reading since German reunification. Compared with Q2 2009, German GDP increased by 3.7%. The decomposition of the GDP numbers will only be published in two weeks but recent monthly data indicate that growth was driven by exports and investments, while the drop in private consumption should at least have come to an end. In addition, the numbers for the first quarter of 2010 were revised upwards to 0.5% QoQ, from 0.2%.
The strong Q2 performance of the German economy is impressive but not surprising. Structurally in a much better shape than many other industrialized countries, it was just a matter of time before the German economy would pick up further speed. In the second quarter, the German economy mainly benefitted from two factors: a catching up in the construction sector after the harsh winter and strong foreign demand for German goods.
Looking ahead, it is almost needless to say that the current growth momentum is hardly sustainable in the coming months. With the one-off impact from the construction sector and normalizing of export growth, German growth will return to more ordinary growth numbers. Nevertheless, despite an inevitable slowdown, all ingredients are there for the German economy to take the next step towards a self-sustained recovery. Confidence indicators are still at high levels, order books are amply filled and German job miracle is continuing. With more and more people returning from short-work schemes to full time schemes to work off increasing backlogs, some minor employment growth should not be excluded, further improving private consumption.
Today’s numbers are an impressive reminder that the German economy is currently playing in a league of its own. However, watch out not to get carried away by blind cheer. As much as the Q1 GDP numbers underestimated the real strength of the economy are Q2 numbers now overestimating it. As so often, the truth lies somewhere in-between. With some slowing down in the coming quarters, the German economy will rejoin the league of the other Eurozone countries. Nevertheless, the German economy should remain the top attraction of the Eurozone league for some time.
The strong Q2 performance of the German economy is impressive but not surprising. Structurally in a much better shape than many other industrialized countries, it was just a matter of time before the German economy would pick up further speed. In the second quarter, the German economy mainly benefitted from two factors: a catching up in the construction sector after the harsh winter and strong foreign demand for German goods.
Looking ahead, it is almost needless to say that the current growth momentum is hardly sustainable in the coming months. With the one-off impact from the construction sector and normalizing of export growth, German growth will return to more ordinary growth numbers. Nevertheless, despite an inevitable slowdown, all ingredients are there for the German economy to take the next step towards a self-sustained recovery. Confidence indicators are still at high levels, order books are amply filled and German job miracle is continuing. With more and more people returning from short-work schemes to full time schemes to work off increasing backlogs, some minor employment growth should not be excluded, further improving private consumption.
Today’s numbers are an impressive reminder that the German economy is currently playing in a league of its own. However, watch out not to get carried away by blind cheer. As much as the Q1 GDP numbers underestimated the real strength of the economy are Q2 numbers now overestimating it. As so often, the truth lies somewhere in-between. With some slowing down in the coming quarters, the German economy will rejoin the league of the other Eurozone countries. Nevertheless, the German economy should remain the top attraction of the Eurozone league for some time.
Thursday, August 12, 2010
Superman in Europa
Draagt Superman deze zomer zwart-rood-goud? In ieder geval de economische Superman van Europa. Het ziet ernaar uit dat het Duitse bureau voor de statistiek morgen een indrukwekkende groeispurt in het tweede kwartaal bekend zal maken. Misschien zelfs een van de sterkste kwartalen sinds de Duitse hereniging. Kan de Duitse economie die steile curve voortzetten en uitgroeien tot mondiale groei-Superman?
Inderdaad, verleidelijk vooruitzicht. De traditionele economische grootmacht, de Amerikaanse economie, staat er op dit moment niet zo goed voor. De kater na het uitlopen van de conjunctuurprogramma's is groot. De angst voor een dubbele dip heerst en het besef neemt toe dat het businessmodel van de Amerikaanse economie zijn beste tijd heeft gehad. Zonder radicale bezuinigingen kan de overheidsschuld tegen 2015 oplopen tot Griekse dimensies.
De industriële capaciteit in de VS lijkt al sinds de laatste conjunctuurcyclus te groot en moet worden gereduceerd. Ook de arbeidsmarkt heeft een structuurprobleem. Sinds 2008 is er een steeds zwakkere reactie van de werkloosheid op een stijging van de vacatures. Dat betekent dat werklozen niet passen bij het profiel van de vacatures of dat de crisis op de vastgoedmarkt de beroemde mobiliteit op de arbeidsmarkt belemmert. In dat geval is het enige antwoord op de Amerikaanse problemen geen nieuw stimuleringsprogramma, maar structurele hervormingen. En die zijn pijnlijk.
Europese optimisten dromen deze dagen dan ook weer van de onzalige 'decoupling', de loskoppeling van de Duitse en Europese economie van ontwikkelingen in de VS. Jammer genoeg heeft het idee van decoupling nog nooit de droomwereld verlaten. Sinds 1970 groeide de Duitse economie circa 35 procent van de tijd weliswaar harder dan de Amerikaanse economie, maar van uiteenlopende trends was alleen sprake tijdens de herenigingsboom begin jaren 90.
De Duitse economie komt goed uit de recessie en zal de conjunctuurlocomotief van Europa blijven. Misschien lukt het zelfs om de Amerikaanse economie nog een tijdje te overtreffen. Maar zoals vaker zijn macro-economische cijfers op het eerste gezicht misleidend. Ook de Duitse economie is niet onkwetsbaar. Het sterke tweede kwartaal is deels toe te schrijven aan een inhaalslag van de bouwsector na de zware winter. Ook de huidige dynamiek van de exportgroei lijkt op termijn nauwelijks houdbaar.
De binnenlandse vraag is weliswaar aan het stabiliseren, maar nog te zwak om de leidende rol van de export over te nemen. Lagere groei in de tweede helft van het jaar ligt in het verschiet. Dit jaar zal het Superman-pak nog zwart-rood-goud gekleurd blijven, maar jammer genoeg werd Superman tot nog toe na elke heldendaad steeds weer gereduceerd tot de alledaagse Clark Kent.
Deze column verscheen eerder in het Belgische dagblad "De Tijd".
Inderdaad, verleidelijk vooruitzicht. De traditionele economische grootmacht, de Amerikaanse economie, staat er op dit moment niet zo goed voor. De kater na het uitlopen van de conjunctuurprogramma's is groot. De angst voor een dubbele dip heerst en het besef neemt toe dat het businessmodel van de Amerikaanse economie zijn beste tijd heeft gehad. Zonder radicale bezuinigingen kan de overheidsschuld tegen 2015 oplopen tot Griekse dimensies.
De industriële capaciteit in de VS lijkt al sinds de laatste conjunctuurcyclus te groot en moet worden gereduceerd. Ook de arbeidsmarkt heeft een structuurprobleem. Sinds 2008 is er een steeds zwakkere reactie van de werkloosheid op een stijging van de vacatures. Dat betekent dat werklozen niet passen bij het profiel van de vacatures of dat de crisis op de vastgoedmarkt de beroemde mobiliteit op de arbeidsmarkt belemmert. In dat geval is het enige antwoord op de Amerikaanse problemen geen nieuw stimuleringsprogramma, maar structurele hervormingen. En die zijn pijnlijk.
Europese optimisten dromen deze dagen dan ook weer van de onzalige 'decoupling', de loskoppeling van de Duitse en Europese economie van ontwikkelingen in de VS. Jammer genoeg heeft het idee van decoupling nog nooit de droomwereld verlaten. Sinds 1970 groeide de Duitse economie circa 35 procent van de tijd weliswaar harder dan de Amerikaanse economie, maar van uiteenlopende trends was alleen sprake tijdens de herenigingsboom begin jaren 90.
De Duitse economie komt goed uit de recessie en zal de conjunctuurlocomotief van Europa blijven. Misschien lukt het zelfs om de Amerikaanse economie nog een tijdje te overtreffen. Maar zoals vaker zijn macro-economische cijfers op het eerste gezicht misleidend. Ook de Duitse economie is niet onkwetsbaar. Het sterke tweede kwartaal is deels toe te schrijven aan een inhaalslag van de bouwsector na de zware winter. Ook de huidige dynamiek van de exportgroei lijkt op termijn nauwelijks houdbaar.
De binnenlandse vraag is weliswaar aan het stabiliseren, maar nog te zwak om de leidende rol van de export over te nemen. Lagere groei in de tweede helft van het jaar ligt in het verschiet. Dit jaar zal het Superman-pak nog zwart-rood-goud gekleurd blijven, maar jammer genoeg werd Superman tot nog toe na elke heldendaad steeds weer gereduceerd tot de alledaagse Clark Kent.
Deze column verscheen eerder in het Belgische dagblad "De Tijd".
Monday, August 9, 2010
Export recovery continues
German exports increased by 3.8% QoQ in June, from a May surge of 7.9%. At the same time, imports increased by 1.9%, from 13.7% in May. As a consequence, the trade surplus widened further to 14.1 billion euro, from 9.8 billion euro in May, supporting the strong pick-up in economic growth in the second quarter.
The German export sector remains the main driver of the recovery. Needless to say that the current export dynamics are not a new status quo. They will eventually slow down. However, with still strong demand, particularly from Asia, for goods “Made in Germany” and the lagging impact of the euro weakening in the first half of the year, German manufacturers are looking into a bright near term future. Filled order books speak volumes. As a consequence, further improvements in the manufacturing sector should once again stabilize the labour market. With more and more people returning from short-work schemes to full time schemes to work off increasing backlogs, some minor employment growth should not be excluded in the coming months.
With today's trade numbers, the time of nitpicking has come to an end. This week’s release of second quarter growth should be a cracker. Up to now, industrial production has shown an impressive performance and even private consumption seems to have stabilized. The German economy is bound to see its strongest quarterly growth rate since reunification.
The German export sector remains the main driver of the recovery. Needless to say that the current export dynamics are not a new status quo. They will eventually slow down. However, with still strong demand, particularly from Asia, for goods “Made in Germany” and the lagging impact of the euro weakening in the first half of the year, German manufacturers are looking into a bright near term future. Filled order books speak volumes. As a consequence, further improvements in the manufacturing sector should once again stabilize the labour market. With more and more people returning from short-work schemes to full time schemes to work off increasing backlogs, some minor employment growth should not be excluded in the coming months.
With today's trade numbers, the time of nitpicking has come to an end. This week’s release of second quarter growth should be a cracker. Up to now, industrial production has shown an impressive performance and even private consumption seems to have stabilized. The German economy is bound to see its strongest quarterly growth rate since reunification.
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