Litteratur: EUs økonomiske integrasjon

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1 EUs økonomiske integrasjon NORSK KOMMUNESEKTOR OG EU/EØS I TEORI OG PRAKSIS Clarion Collection Hotel Hammer, Lillehammer Torsdag 25.oktober : EUs økonomiske integrasjon og det indre markedet : Euroen og den økonomiske og monetære unionen Ole Gunnar Austvik Høgskolen i Lillehammer Litteratur: EUs økonomiske integrasjon Cini / Borragán OGA1 *Baldwin & Wyplosz OGA2 Kapitler/sider: Sider: *Alternativ litteratur på engelsk til OGA1: Sider: Ekstra litteratur om euroen (for den ivrige): CESIfo, 2012: The EEAG Report on the European Economy Munchen: CESIfo Group. Chapters 2 & 3: pages pages. Petreski, Marjan, 2007: Is the Euro Zone an Optimal Currency Area? University of American college - Skopje. Working paper series SSRN-id pages. 1

2 Grunnleggende for internasjonal handel og økonomisk integrasjon Personer, bedrifter, regioner og land tjener på å spesialisere seg i noen (få) økonomiske aktiviteter heller enn å gjøre alt selv Eksporten blir alltid mer ensidig enn importen. Handelen skaper gjensidig avhengighet av hverandres markeder og produksjon Handelskreeringen er vinn-vinn for alle land (fred) Men alle vinner ikke like mye Omstilling av produksjonslivet er tap-vinn, men der vinn > tap i økonomisk forstand. (ufred) Vinst og tap kan være små, men også svært store Viktig med tid til omstilling Andre forhold enn de økonomiske Eksport og import (gjennomsnitt) som prosent av brutto nasjonalproduktet i noen land på 1990-tallet Eksport og import (gjennomsnitt) som prosent av BNP Japan USA EU-15 Tyskland Korea Norge Belgia Singapore 2

3 Historiske hovedtrekk. I stor grad basert på lokal selvberging Merkantilismen -> ca Den franske revolusjonen Den industrielle revolusjonen Kapitalismens framvekst Industrialiseringen av Europa rundt 1870 (Molle1991: 39). 3

4 Gjennomsnittlige tollsatser på britisk, fransk og tysk import (Molle 1991: 41). Mellomkrigstida Kriseperioden Hitler, Keynes, Roosevelt Ny politikk Statens rolle viktig Forhandlerens dilemma 4

5 9 5

6 Hva er økonomisk integrasjon? Negativ integrasjon Positiv integrasjon NB: Ikke normativ ladede ord Konkurrransen presser priser og kostnader ned og de blir mer like på tvers av land Konkurransen presser også kostnadsdrivende politikk (avgifter, reguleringer etc) ned race-to-bottom (RTB) -> Behov for minstesatser på politikk som berører konkurranseforhold 6

7 Nivåer på økonomisk og politisk integrasjon - mellom autarki og føderasjon Type integrasjon: Negativ integrasjon Negativ Positiv Positiv integrasjon Autarki Frihandelsområde Tollunion Politikkområder Type integrasjon: Fellesmarked Ingen Fri flyt Felles Fri flyt Harmoni- Felles/ Felles/ Felles samhandel av varer ytre av sering av koord. koord. utenriksog tjenester tollsatser prod. konkurr. finans- penge- og faktorer vridende politikk politikk forsvarspolitikk* Valuta- politikk union WTO Felles regjering Økonomisk union > konføderasjon Monetær union Politisk union Føderasjon >? * Eksempler: Merverdiavgift, særavgifter (som oftest minstesatser), konkurranseregler, produktspesifikasjoner, bestemmelser om sosiale forhold, godkjennelse av utdannelse, miljøstandarder, offentlige innkjøpsregler, arbeidsforhold, regionalpolitiske virkemidler osv Kilde: Austvik 2002: 309 Europe in concentric circles 7

8 Coffee break Euroen og den økonomiske og monetære unionen Litteratur om euroen (for den ivrige): CESIfo, 2012: The EEAG Report on the European Economy Munchen: CESIfo Group. Chapters 2 & 3: pages pages. Petreski, Marjan, 2007: Is the Euro Zone an Optimal Currency Area?University of American college - Skopje. Working paper series SSRN-id pages. 8

9 Euro area GDP

10 Euro area unemployment Source: Early Warning (IMF estimates) 10

11 Youth (15-25) unemployment in the EU Source: Real-World Economics Review 2012 The Euro Zone

12 Konsekvenser av en felles valuta Fordeler Mikroøkonomisk: Slipper kursusikkerhet og vekslingskostnader; fremmer integrasjon Ulemper Makroøkonomisk: Mister en selvstendig pengepolitikk. Ytre devaluering umulig. Indre devaluering vanskelig. En gruppe land der en felles valuta gir fordeler > ulemper kan utgjøre et optimalt valutaområde. Utgjør eurosonen et optimalt valutaområde? 12

13 Four main criteria for a successful currency union i.e. for an optimal currency area (OCA) Labor mobility. Physical ability to travel (visas, workers' rights, etc.), lack of cultural barriers to free movement (such as different languages) and institutional arrangements (such as superannuation transferred throughout the region) (Robert A. Mundell 1961)... People can move quickly across sectors, professions, cultures and borders.. Capital mobility and price and wage fleibility across the region. Market forces of supply and demand automatically distribute money and goods to where they are needed. In practice this does not work perfectly when there is no true wage fleibility. A functioning Single market across the Community A risk sharing system with a fiscal transfer mechanism to redistribute money to areas and sectors which have been adversely affected by the first two characteristics. Ta redistribution to less developed countries/regions. However, it is politically difficult to implement as the better-off regions and countries rarely give up their revenue easily. a common or coordinated fiscal policy Similar business cycles. Economic integration makes counties eperience booms or recessions together and a shared central bank can promote growth in downturns and contain inflation in booms. Should countries in a currency union have idiosyncratic business cycles (eperience asymmetric shocks), then optimal monetary policy may diverge across countries and union participants may be made worse off under a joint central bank... Similar policy is suitable when countries are in similar situations are similar Source: Frankel, Jeffrey A. & Rose, Andrew K. (1997)."The Endogenity of the Optimum Currency Area Criteria". The Economic Journal 108 (449): The Maastricht - criteria The Maastricht criteria of 1991 (also known as the convergence criteria) are the criteria for European Union member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. 1. Inflation rates: No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU. 2. Government finance: 2.1 The ratio of the annual government deficit to gross domestic product (GDP) must not eceed 3%.Only eceptional and temporary ecesses would be granted for eceptional cases. 2.2 Government debt to GDP must not eceed 60% 3. Echange rate: Applicant countries should have joined the echange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period. 4. Long-term interest rates: The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest inflation member states. a stable internal and eternal economy before entering the euro 13

14 Stability and Growth Pact (SGP) The pact was adopted in 1997so that fiscal discipline would be maintained and enforced in the Economic and Monetary Union (EMU). To prevent deficit budgeting. A surveillance system to detect imbalances in public finances. Member states adopting the euro have to meet the Maastricht convergence criteria, and the SGP ensures that they continue to observe them. 1. Government deficit to gross domestic product (GDP) must not eceed 3%. 2. Government debt to GDP must not eceed 60% Various procedures / reaction mechanisms were established when countries run deficits larger than the Maastricht Treaty prescribed in order to restore balance and / or issue fines, incl. deposits, requirements to change policy and fines. Many countries have a public debt larger than what is allowed in the Maastricht criteria, including the big ones Most countries run a public deficit larger than what is allowed in the Maastricht criteria, including the big ones 14

15 Initially, the relative high inflation in the periphery countries was often interpreted as inherent in the process of productivity and price convergence due to capital flows from the core. Increasingly, however, it also reflected overly-optimistic epectations that the then rising trend in income and real-estate prices would continue into the future (and/or that their investment would be somehow guaranteed). At a global level, such an illusion burst in the period from August 2007, when the interbank market first seized up, to October 2008, when the collapse of Lehman Brothers triggered a major financial crisis in the United States and Europe. Over time the appreciating countries developed current account deficits, as rising prices undermined the competitiveness of their eports and rising real incomes boosted imports. 15

16 Interest rates spread: Net yields on 10-year goverment bonds Because of the echange rate risks, interest rates were widely spread before the irrevocable establishment of echange rates (1998) in the euro zone. During this phase, the vanishing depreciation risk was associated with a vast underpricing of default risk. This phase ended in autumn 2008, when after the demise of Lehman Brothers, doubts about the creditworthiness of individual European countries emerged. Interest rates have spread again since the beginning of the crisis because investors reckon with different default probabilities among the euro countries. Eorbitantly high interest rates must now be paid by some GIPS countries. The etensive EU rescue measures were caused by rapidly rising interest spreads on government bonds. The similarity between pre-euro interest dispersion and today s dispersion is striking. In the past interest rates diverged due to the fear of depreciation; now they do so because of the fear of default. Prices of selected government bonds The large and volatile interest spreads emerging in 2010 in the euro area were considered particularly dangerous not only because they sharply raised borrowing costs in many countries but also because a substantial share of the troublesome debt was held by commercial banks in core European countries, which thus found themselves potentially eposed to large losses. The potential magnitude of the write-off losses was quite large. On 7 May year Greek bonds, issued four years before the crisis, were traded at a discount of more than 30 percent; longer-term Portuguese and Irish bonds were traded at discounts of about 10 percent. A few months later, the discounts on the Greek, Portuguese and Irish bonds were substantially higher. By November 2010, the discounts on Irish bonds were approaching 25 percent. The losses caused Ireland to be the first country to apply for help from the EFSF in November This was clearly a relief both for commercial banks and for Ireland, as the country could then save on interest payments on newly issued government debt and keep its rescue promises. Against an ongoing market rate of interest between 8.3 percent and 9.4 percent charged by private investors on Irish government bonds with a maturity of 5 to 10 years, towards the end of November Ireland was given the opportunity to borrow funds with a similar maturity from the EFSF at the substantially lower rate of 5.8 percent. It is debatable whether Ireland really was in a crisis that justified the help from the rescue funds. After all, Ireland has very low labor taes in comparison to other EU countries that it could easily have increased to solve the country s liquidity problems without jeopardizing the country s own business model eplicitly based on low corporate (not low labor) taes. Source: The EEAG Report on the European Economy, CESifo, Munich

17 Current account balances The current account (driftsbalansen) deficits are, by definition, identical to the respective capital imports that these countries absorbed. Current account deficits and capital flows are jointly determined by economic forces. The causal origin of an imbalance can in principle come from the goods and services, as well as from the capital markets. Current account = balance of payments + capital account. Driftsbalansen = Handelsbalansen + rente- og stønadsbalansen = Kapitalregnskapet 17

18 A current account deficit measures the annual increase in the net foreign debt position of a country, and a current account surplus represents the annual increase in its net foreign asset position. -> The inflated price and wage levels in the first years of the euro are not sustainable. 18

19 The European debt crisis The European debt crisis followed the US financial crisis in 2008 with a delay of one and a half years. While its first signs were visible in November and December of 2009 when the rating agency Fitch downgraded Ireland and Greece, it culminated on 28 April 2010 when the intra-day interest rate for two-year Greek government bonds peaked at 38 percent. Since then capital markets have been etremely unstable, showing signs of distrust in the creditworthiness of the GIIPS countries: Greece, Ireland, Italy, Portugal and Spain. The European Financial Stabilization Mechanism (EFSM)is an emergency funding programme reliant upon funds raised on the financial markets and guaranteed by the European Commission using the budget of the European Union as collateral. It runs under the supervision of the Commission and aims at preserving financial stability in Europe by providing financial assistance to member states of the European Union in economic difficulty. The Commission fund, backed by all 27 European Union members, has the authority to raise up to 60 billion. A separate entity, the European Financial Stability Facility (EFSF),is authorized to borrow up to 440 billion. The European Stability Mechanism (ESM)succeeds the temporary EFSF and EFSM. The ESM is an international organisation located in Luembourg.The ESM was established on 27 September 2012, and will function as a permanent firewall for the eurozone with a maimum lending capacity of 500 billion. Source: CESIfo, 2012: The EEAG Report on the European Economy Munchen: CESIfo Group.. 19

20 Hva slags system trenger vi? Politikere internasjonalt har nå (etter finanskrisen 2008) akseptert at det eksisterende finansielle system må bli bedre. Det synes ikke som at viljen til å endre det så mye at det reflektere nye økonomiske realiteter er der enda Endringer som reflekterer disse realitetene vil komme etter hvert som det verste rydde opp i dagens system. Reguleringsfeilen. Det kan ta lang tid så lenge en opptur som følge av omfattende kapitalinjeksjoner varer. Først når en ny krise kommer er det grunnlag for politisk vilje til systemrevisjon. Strukturfeilen. Kongen er død lenge leve kongen! Holdes gamlekongen i live intravenøst? Solutions? To solve the debt problem does not solve the underlying long-term economic problem. The growth and unemployment problem must also be solved A common/coordinated fiscal policy (the neo-functional solution)? Internal devaluation Massive restructuring of the affected economies takes place -followed by political and social unrest Possibility for Keynesian solutions Back to national currencies for some countries (the intergovernmental solution)? Eternal devaluation. Not so massive restructuring.. Problems with handling debt. The financial system must better reflect the real economy. Political desire and ideology on the one hand and diverging interests and situations on the other challenge the EU ability to make (real economy) decisions. Worst case: an uncontrolled breakdown of the system. 20

21 Virkninger for Norge av eurokrisen: 1. Handel: A: Eksport : Etterspørsel i utlandet ned først i volum og etterhvert i priser Appresiering av NOK gjør norske priser høyere B: Import: Appresiering gjør importen billigere. Importkonkurrerende næringer også utsatt. 2. Bankvesenet. Norske banker har lånt ut til utenlandske banker som kan få betalingsvansker/gå konkurs når deres utlån ikke betales. -> Renta opp 3. Oljefondet. Det norske oljefondet er basert på at internasjonale kapitalmarkeder / finanssystemet skal fungere. Aksjer (privat) 60%, obligasjoner (statlige), 40 % nå 5 % eiendom (realverdier). Systemkrasj: De som eide aksjer i russisk jernbane før første verdenskrig hadde bare samleverdien av aksjebrevene som verdi etterpå. Norge vs. andre europeiske land: 1. Mindre eksponert for etterspørselssvikt enn andre europeiske land pga eksportstrukturen 2. En svært rik stat har ingen utenriksøkonomiske problemer. Kan bruke penger til å etterspørre mer (anlegg osv) -> Store importlekkasjer av varer og tjenester - inkludert økt innvandring Takk for oppmerksomheten! Ole Gunnar Austvik KS