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Capital Markets 101: The European Debt Crisis

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A German perspective on the European debt crisis and the implications for the global marketplace
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eter Fischer ead of Economic Affairs mbassy of the Federal Republic of Germany Capital Markets Initiative 13/07/2012
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Page 1: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Page 2: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

GDP per Nation/Region 2011 (Source: IMF)

Country/Region GDP (million US $)

European Union 17,577,691

United States 15,094,025

Eurozone 13,104,996

Germany 3,577,031

France 2,776,324

Greece 303,065

Portugal 238,880

Ireland 217,669

Spain 1,493,513

Italy 2,198,730

Page 3: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Yield on €-Zone Government Bonds (10 Y)

Page 4: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Spreads on €-Zone Government Bonds over German Bonds (10 Y)

Page 5: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Unit Labor Costs in €-Zone Countries

Page 6: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

0

20

40

60

80

100

2007 2010 2011 2012 2013 2014 2015

USA

Eurozone

Germany

UK

Government Gross Debt in % of GDP („debt to GDP ratio“)

Source: IMF World Economic Outlook Database, April 2012

Page 7: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Fiscal Balance (Budget Deficit)

-14

-12

-10

-8

-6

-4

-2

02008 2009 2010 2011 2012 2014

Source: IMF World Economic Outlook Database, April 2012

USA

Eurozone

Germany

Page 8: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Percentage of GDP Per Nation in €-Zone (2011)

Page 9: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

GDP per Nation in % of €-Zone GDP (2011)

0

5

10

15

20

25

30

Germany France Greece Portugal Ireland Italy Spain

Page 10: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

2011 GDP per Nation in % of €-Zone GDP (billion US $)

0

10

20

30

40

50

60

Germany+France Greece+Portugal+Ireland Italy+Spain

Page 11: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Central Bank Balance Sheet Expansion, 2008-2012

Page 12: Capital Markets 101: The European Debt Crisis

Peter FischerHead of Economic AffairsEmbassy of the Federal Republic of Germany

Capital Markets Initiative 13/07/2012

Central Bank Outright Asset Holdings, June 2012


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