Sovereign Debt Conference

Session 2: Eurozone Countries at Risk (then and now)Prof. Louka T. KatseliLondon,

09.09.2013

2008 main economic features: Portugal, Spain, Ireland, Greece

GDP* General

Government Gross Debt**

Current-Account

Balance**

Annual Real Effective Exchange Rates vs

Euroarea***

General Government

balance**

Gross Fixed Capital Formation as (%) of

GDP*

Unemployment Rate*

PORTUGAL 0.0 71.6 -12.6 101.94 -3.6 22,5 8.5

SPAIN 0.9 40.1 -9.6 102.84 -4.5 28,7 11.3

IRELAND -3.0 44.3 -5.6 94.48 -7.3 21,8 6.3

GREECE -0.2 113.0 -17.9 103.84 -9.8 22,6 16.6* Annual percentage change

** As a percentage of GDP

*** 2005=100 (Price deflator, exports of goods and services)

Source: EUROPEAN ECONOMY 6|2011

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2008 – 2012 Macroeconomic Policy Measures: Portugal, Spain, Ireland, Greece

Government Expenditures (%) of

GDP*

Total Tax Revenue (%) of GDP** Labour Compensation per

Employee**** Unit Labour Cost****

2008 2012 2008 2011*** 2008 2012 2008 2012

PORTUGAL 44,8(77)

47,5(78,4) 35,9 36,1 108,7 110,1 104,5 99,8

SPAIN 41,5(450,9)

48,0(493,6) 35,5 33,0 115,2 120,4 113,0 106,4

IRELAND 42,7(77)

42,0(68,8) 31,1 29,7 114,9 111,5 112,6 96,5

GREECE 50,6(117,9)

54,8(106) 34,2 34,9 111,0 103,7 101,5 102,9

*General Government Expenditures in bl. € in parenthesis**Total Revenue from Taxes and Social Contributions as a (%) of GDP***no available data for 2012**** OECD Index base (2005=100)Source: European Commission – Eurostat Database, OECD Stat Extracts

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2012 and 2013 main economic features: Portugal, Spain, Ireland, Greece

GDP* General

Government Gross Debt**

Current-Account

Balance**

Annual Real Effective Exchange

Rates vs Euro area***

General Government

Balance**

Gross Fixed Capital Formation as (%) of

GDP

Unemployment Rate*

PORTUGAL-3.2 (-2.3)

123.6 (123.0)

-1.9 (0.1) 102.61 -6.4

(-5.5)16

(14,7)15.9 (18.2)

SPAIN-1.4 (-1.5)

84.2 (91.3)

-0.9 (1.6) 103.51 -10.6

(-6.6)19,2 (17,7)

25.0 (27.0)

IRELAND0.9

(1.1)117.6

(123.3)5.0 (3.1) 96.35 -7.6

(-7.5)10,0 (10,3)

14.7 (14.2)

GREECE-6.4

(-4.2)156.9

(175.2)-5.3

(-2.8) 111.02 -10.0(-3.8)

13,1 (13,2)

24.3(27.0)

* Annual percentage change** As a percentage of GDP*** 2005=100 (Price deflator, exports of goods and services)2013 forecasts in parenthesesSource: European Economic Forecast, EUROPEAN ECONOMY 2|2013, Spring 2013

Sovereign Debt Conference

Key Questions:

1.Given the experience and policy responses, what are likely short-term and medium term prospects for the economy, debt, financial sustainability and the Eurozone?

2.What are important lessons for Eurozone and national policies to be drawn from national experiences (successes and failures)? How best to tackle growing debt and rising unemployment?

3.What are the future major risks and policy challenges for the Eurozone?

Sovereign Debt Conference