europ eco outlook 2 may 2013 hs_financelab
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TRANSCRIPT
Slow�turnaround
European�Economic�and�Crisis Update
Holger�Sandte,�Chief European�Analyst2 May�2013�
• Financial�markets:�In�central�banks�we�trust�(too�much)
• Euro�crisis:�where�we�are�and�where�we�– might�– go
• EuroͲarea�recovery:�slow,�fragile,�multiͲspeed
• ECB:�When�the�toolbox�is�almost�empty�…
• Key�takeͲaways________________• Annex�of�tables�• Key�forecasts
2
Equity�Markets:�Japan!�
3
Financial�markets
1990�Ͳ�2012 2003Ͳ07 2008 1990�Ͳ�2012 endͲ2012 01/05/2013 2013�low 2013�high
S&P�500 8 11 Ͳ38 12 1,426 1,583 11.0 Ͳ0.9 11.0
Euro�STOXX�50 7 13 Ͳ44 3 2,636 2,712 6.2 Ͳ1.4 2.9
DAX* 10 23 Ͳ40 14 7,612 7,914 6.1 Ͳ1.8 4.0
Nikkei Ͳ3 14 Ͳ42 5 10,395 13,694 31.7 Ͳ1.7 31.7
MSCI�EM�(USͲ$) 15 38 Ͳ54 21 1,055 1,038 4.1 Ͳ4.1 Ͳ1.6*�PerformanceͲIndex
�
current�compared�to�Indexchange�p.a.�in�% change�over�endͲ2012�in�%
Source: Nordea Markets and Reuters Ecowin
05 06 07 08 09 10 11 12 1350
100
150
200
50
100
150
200Index 1 Jan 2005=100
Euro STOXX vs S&P vs Nikkei
Euro STOXX
Nikkei 225
S&P 500
Index 1 Jan 2005=100
EUR�govies:�spreads�narrowing��
4
Financial�markets
Source: Nordea Markets and Reuters Ecowin
09 10 11 12 130
5
10
15
20
0
5
10
15
20 10y Government bond yields spread vs German Bunds
100 bp100 bp
FranceItalySpainIrelandPortugal
Commodity�prices:�reflecting�global�soft�spot
5
Commodities
Source: Nordea Markets and Reuters Ecowin
07 08 09 10 11 12 132000
4000
6000
8000
10000
12000
30
50
70
90
110
130
150USD/ton
Copper (rhs)
Commodity prices
Brent
USD/barrel
• Euro�crisis:�where�we�are�and�where�we�– might�– go– Why is�Europe�struggling so�hard with�the�crisis?– The�“German�view”�– Where�are�we�now?– Where�do�we�go�from�here?– Lessons�form�Cyprus�for�the�Banking�Union
6
Why is�Europa�struggling so�hard with�the�crisis?
• It’s�a�complex�crisis:�debt�(both�public�&�private),�economic�structures,�competitiveness,�banks,�confidence,�politics,�institutions�
• Euro�area��=��designed�by�poliƟcians��т��opƟmal�currency�area
• Euro��=��currency�without�a�state
• Only�the�ECB�can�act�quickly,�17�European�governments�cannot
• Big�differences�between�countries�/�governments�…– …�in�economic�and�monetary�policy�ideas�(”Latin”�vs.�”Germanic“�view)– …�concerning�the�causes�of�the�crisis�and�the�right�therapy�(how�much�austerity?)– …�in�the�willingness�to�give�up�sovereignty�/�to�shift�power�“to�Europe”– …�in�the�vision�for�Europe:�there simply is�no (single)�vision
• Below�the�European�surface,�there�is�still�a�lot�of�nationalism,�as�people’s�attitudes�are�shaped�by�national�historical�experience
7
Euro�crisis
Monetary�unions�now�and�past�
8
Euro�crisis
Source:�Nordea�Markets�and�Roubini Global�Economics
Political�Union
Fiscal�transfers�between�states
Hard�budget�constraints�for�member�states
Centralized�control�of�money�supply�by�Central�
Bank
Financial�stability�function�of�Central�Bank Regime�type Outcome
Latin�Monetary�Union Orderly�dissolution�/�move�to�Gold�Standard�in�1926
Scandin.�Monetary�Union SemiͲorderly�dissolution
Gold�Standard Disorderly�dissolution�in�the�1930s
Ruble�Zone n/a National �monetary�union
Disorderly�dissolution�1992/93
Argentina partial Peg Disorderly�dissolution�2001
U.S.�1790�Ͳ�1850 Added�hardͲbudget�constraints
U.S.�1850�Ͳ�1861 Civil �War
U.S.�1861/65�Ͳ�1913 yes Added�partial �centralization�of�CB's �control �of�MS
U.S.�1913�Ͳ�1935 partial no Added�finanical �stability�function�for�the�Fed�founded�in�1913
U.S.�post�Ͳ�1935 Stable
European�Monetary�Union perhaps
Sui�generis�������17�states�Ͳ�one�currency
more�integration�or�breakͲup
Based�on�Roubini�Global�Economics�(A�HowͲTo�Manual�for�an�Amicable�EZ�Divorce)
QuasiͲfixed�exchange�rate
National �monetary�union
no
no
not�yet yes
yes
yes
no
yes
yes
yes
no
no
no
no
partial
no
The�”German�view”:�Do.�your.�homework.
(Note:�There�is�no�uniform�”German�view”�properly�speaking.�What�outside�Germany�is�called�“the�German�view”�is�probably�the�position�the�government�and�the�Bundesbank agree�upon):��
• Crisis�was�primarily�caused�by�excessive�public�debt• “Austerity”�is�an�unavoidable�part�of�the�solution,�not�part�of�the�problem.�No�pain,�no�gain��• Austerity�policy�must�be�complemented�by�growthͲenhancing�structural/supplyͲside�reforms�• Germany�played�no�role�in�causing�the�crisis• For�many�reasons�– economic,�financial,�political�and�historical�–,�Germany�is�highly�
interested�in�European�integration�and�in�a�Euro�area�that�works.�Therefore,�it�contributes�to�buying�time�for�crisis�countries�to�do�their�homework�
• Any�solution�that�might�mean�higher�inflation�in�Germany�is�out�of�the�question
9
Euro�crisis /�Germany
…�and�don’t�ask�for�too�many�lifebelts
10
Euro�crisis /�Germany
Source:�The�Economist�
Maastricht�world vs.�real�world
The�Maastricht�world
• Fiscal�selfͲreliance,�politicians�conͲstrained�by�rules�(stability�and�growth�pact/SGP,�1997)�and�market�pressure�
• No bailͲout
• Independent�central�bank,�no�monetization�of�government�debt�
• EMU�economies�converge economically�and�financially
• National�policies�fully�sufficient�to�counter�any�financial�imbalances�
11
Euro�area
The�real�world�in�2013�
¾ Market�pressure�didn’t�work�and�politicians�ruined�the�SGP
¾ BailͲouts�for�Greece�(2010�and�2012),�Ireland�(2010),�Portugal�(2011),�Spanish�banks�(2012),�and�Cyprus�(2013)
¾ ECB�dancing�very�close�to�finance�ministers�
¾ Large�economic�divergencies between�EMU�countries,�financial�market�fragmented�
¾ Financial�stability�seen�as�a�European�task�Æ Banking�Union,�but�still�a�long�way�to�go
Euro�crisis�– where�are�we�now?
• BreakͲup: off�the�table�– for�now
• Firewall: ESM�and�ECB�technically�ready�to�act
• Confidence: returned�to�some�degree,�but�still�low
• Economy: in�recession�since,�slow�and�multiͲspeed�recovery�likely�
• Rebalancing: still�a�long�way�to�go;�mostly�driven�by�deficit�countries
• Budget�deficits: mostly�shrinking�at�a�slow�pace
• Financial�markets declining�on�the�funding�side,�but�still�strong�on�thefragmentation: lending�side�(interest�rates,�credit�conditions)
• Banking�Union: moving�ahead�very�slowly
• Politics: ongoing debate�on�how�much�austerity�is�needed
12
Euro�crisis
Euro�area�– where�do�we�go�from�here?
13
Euro�crisis
Closer�integration�or�breakͲup?�
EMUͲ17�minus�GR,�CY�Ͳ possible
Northern�Euro
Meltdown
What�about�EU and�internal�market?Huge political andeconomic costs
Political�Union�/�Banking�Union�/�Fiscal�Union(“more�Europe”)
“Stability�union”based�on�competition,�with�liability�and�control�going�hand�in�hand,�the�German�view
“Transfer/liability�union”based�on�solidarity,�the�Mediterranean�view
But�how�exactly? Economic�reason�may�be�on�Germany’s�side.�But�political�conditions�and�time�are�not.�The�monetary�union�turns�into�a�“liability�union”.�MuddlingͲthrough�continues.
Back�to�Maastricht(national�sovereignty,�no�bailout)
Lessons�from�Cyprus�for�the�Banking�Union
Although�Cyprus�is�a�very�special�case,�there�may�be�some�lessons�to�draw:• BailͲin�of�a�bank’s�creditors�is�possible,�tax�payers�do�not�have�to�save�every�troubled�bank�• That�may�soften�German�resistance�to�a�Banking�Union�• Crisis�underscored�the�need�for�a�single�supervisor�not�captured�by�national�interests• Common�resolution�mechanism:�The�ECB�fills�a�part�of�that�role�by�providing�(or�not)�
emergency�liquidity• Needed:�A�credible�– probably�not�national�but�European�– system�of�deposit�insurance�
Euro�crisis /�Banking�Union�
14
Five�elements�of�a�European�Banking�Union• single�rulebook�for�banks�– exits�to�a�large�extent• single�supervisory�mechanism�– currently�discussed�by�European�Parliament• single�resolution�mechanism�– proposal�from�European��Commission�later�this�year�• common�fiscal�backstop�– ongoing discussion�about�bank�recapitalisation�by�ESM• common�system�for�deposit�insurance�– seems�to�be�off�the�table�for�the�moment
• EuroͲarea�recovery:�slow,�fragile,�multiͲspeed
• A�look�at�some�EuroͲarea�countries– Germany:�back�to�growth�from�early�2013�on�– France:�no�easy�way�out�of�the�gloom�– Italy�in�a�dead�end�– any�way�out?– Spain�adapting�to�the�postͲbubble�environment– Cyprus�...�and�Slovenia�next?
• ECB:�When�the�toolbox�is�almost�empty�…
15
A common�currency,�but�very�different�paths�
• The�“crisis�countries”�…• …�and�we�left�out�Greece�here
16
Euro�crisis
• The�more�stable�countries�…• …�some�of�which�are�also�in�recession
Source: Nordea Markets and Reuters Ecowin
08 09 10 11 12 1385
90
95
100
105
85
90
95
100
105IndexIndex Real GDP, Q1 2008 = 100
CyprusSpain
IrelandItaly
PortugalSlovenia
Source: Nordea Markets and Reuters Ecowin
08 09 10 11 12 1390
95
100
105
90
95
100
105IndexReal GDP, Q1 2008 = 100Index
BelgiumGermanyFinland
FranceNetherlandsAustria
ShortͲterm�outlook:�slow�und�bumpy�recovery�
• Euro�area�struggling�to�get�out�of�recession�and�the�outlook�is�not�rosy
• Here�is�why�we�still�expect�some�growth�from�H2�2013�on:�
– Monetary�policy�will�remain�extremely�loose�and�the�transmission�mechanism�should�work�better�over�time
– Fiscal�policy�was�highly�restrictive�last�year�but�is�less�so�this�year�and�probably�next
– A�weaker�euro�and�healthy�growth�in�the�US�and�many�Emerging�Markets�should�provide�tailwind�to�exports
– Structural�reforms�and�efforts�to�regain�competitiveness�will�pay�off�– although�we�have�to�admit�that�we�don’t�know�exactly�when.�
• GDP�forecast (2013/14):�Ͳ0.4%�/�1.4%
17
Euro�area
Source: Nordea Markets and Reuters Ecowin
07 08 09 10 11 12 13 14-5
-4
-3
-2
-1
0
1
2
3
-5
-4
-3
-2
-1
0
1
2
3% q/qGDP growth% q/q
GermanyFranceItalySpain
Source: Nordea Markets and Reuters Ecowin
04 05 06 07 08 09 10 11 12 13 14-12.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5
-12.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5% y/yEuro area GDP% q/q annualised
M1�might�be�good�indicator�for�the�economy�
• Yes,�the�recovery�is�fragile,�but�all�hope�is�not�lost�
• M1�=�money�to�spend�=�currency�in�circulation�plus�overnight�deposits
• If�former�relationships�have�not�completely�broken�down�…
• …�M1�is�compatible�with�a�recovery�…• …�and�also�with�the�idea�that�equity�
markets�have�run�a�bit�far,�driven�by�liquidity
18
Euro�area
30
40
50
60
70
0
4
8
12
16
00 02 04 06 08 10 12
Source: Nordea Markets and Reuters Ecowin
PMI Compo-s ite (rhs )
M1 (3m moving average6 months ahead)
% y/y IndexM1 and PMI Composite
-60
-40
-20
0
20
40
60
-3
0
3
6
9
12
15
00 02 04 06 08 10 12
Source: Nordea Markets and Reuters Ecowin
Euro Stoxx 50 (rhs )
%�y/y%�y/y
M1 (3m moving av., 6 months ahead)
M1 and the equity market
Which�currency�is�weak?�
19
Euro,�US�dollar�
Source: Nordea Markets and Reuters Ecowin
00 01 02 03 04 05 06 07 08 09 10 11 12 1380
90
100
110
120
130
0.8
1.0
1.2
1.4
1.6
1.8IndexExternal value of the euroEUR-USD
stronger EUR
Real effective exchange rateQ1 1999=100 (rhs)
Source: Nordea Markets and Reuters Ecowin
75 80 85 90 95 00 05 1080
90
100
110
120
130
80
90
100
110
120
130Index IndexReal broad effective USD
Stronger USDMean +/- std. deviation
Who�needs�a�weaker�currency?
20
Source: Nordea Markets and Reuters Ecowin
07 08 09 10 11 12 1375
80
85
90
95
100
105
75
80
85
90
95
100
105Index Jan 2008 = 100
Manufacturing outputIndex Jan 2008 = 100
USAEuro area
Euro�area vs.�US
FX�longͲterm�view:�USD�to�strengthen�vs.�EUR
21
Source: Nordea Markets and Reuters Ecowin
05 06 07 08 09 10 11 12 13 141.10
1.20
1.30
1.40
1.50
1.60
93
95
97
99
101
103
105
107 USDForecast
EMU real GDP relative toUS real GDP
Index 2005=100
EUR/USD, rhs
EUR/USD
Source: Nordea Markets and Reuters Ecowin
10 11 12 13 141.00
1.10
1.20
1.30
1.40
1.50
1.00
1.10
1.20
1.30
1.40
1.50USD EUR/USD USD
Note: The model is based on the EUR-US 2Y swap rate differential (+). R = 0.69
Model forecast and95% confidence interval
Model forecast based on Nordea's swap rate forecast
Actual
Why�Germany�is�coping�relatively�well�at�the�moment
• ExportͲbased�growth�model�works�as�long�as�Emerging�Markets�and�US�are�growing�
• No�public�or�private�debt�excesses�to�correct
• Fiscal�policy�has�leeway�not�to�get�restrictive�now�(and�may�be�not�later,�either)
• Low�ECB�policy�rates�passed�through�to�companies�and�consumers�(monetary�transmission�mechanism�works)��
• Stable�labour�market;�new�jobs�are�created�at�low�growth,�but�productivity�stagnates�
• GDP�forecast (2013/14):�0.7%�/�2.1%
22
Germany
Source: Nordea Markets and Reuters Ecowin
00 01 02 03 04 05 06 07 08 09 10 11 12 132
3
4
5
6
38
39
40
41
42 Mio. persons
Unemployed, rhs
Employed
Labour marketMio. persons
-40
-20
0
20
40
-20
-10
0
10
20
00 02 04 06 08 10 12
Exports
Capex spending
Ifo export expec-tations (rhs)
% y/y Index
Source:�Nordea�Markets�and�Reuters�Ecowin�
ShortͲterm�outlook:�back�to�growth�in�early�2013��
• After�a�0.6%�drop�in�GDP�in�Q4,�survey�data�point�towards�a�rebound�in�Q1
• Capex spending�(down�five�quarters�in�a�row)�likely�to�have�stabilised
• Improvement�in�Southern�Europe�will�translate�into�German�exports�(as�well�as�capex sprending and�employment)
• Main�risks:– Deepening�of�the�crisis�in�southern�Europe
– France�sliding�into�a�deep�recession
• LongͲterm�challenges– Low�trend�growth
– Unfavorable demography
– (Parts�of�the)�banking�sector�
23
Germany
Source: Nordea Markets and Reuters Ecowin
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14-2
-1
0
1
2
80
90
100
110
120% q/q
Forecast
GDP and IFOIndex 2005=100
IFO, business expectations
GDP (rhs)
Source: Nordea Markets and Reuters Ecowin
07 08 09 10 11 12 1370
80
90
100
110
120
130
140
150
160
70
80
90
100
110
120
130
140
150
1602010=100
Euro areaTotal
Ex-Euro area
Export orders2010=100
A�house�price�bubble�in�Germany?�Well�…
24
Source: Nordea Markets, OECD and Reuters Ecowin
96 98 00 02 04 06 08 10 1250
100
150
200
250
300
350
50
100
150
200
250
300
350Index
1995=100
Germany
Denmark
Real home pricesIndex1995=100
Norway
Sweden
Source: Nordea Markets, OECD and Reuters Ecowin
90 92 94 96 98 00 02 04 06 08 10 1250
75
100
125
150
175
50
75
100
125
150
175IndexIndex Home price-income ratio
Note: 100 = long term average
DenmarkSwedenNorwayGermany
Germany
What�Germans�are�(not)�talking�about
…�talking�about:
• Euro�crisis:”Money�can’t�buy�you�friends”
• Tax�fraud�
• Fair�pay,�working�poor
• ”Energiewende”
• German�dominance (in�the�Champions�League)
25
…�not�(a�lot)�talking�about:
• Be�happy
• Germany�gains�from�the�euro�crisis�(low�interest�rate,�weaker�euro,�immigration)
• Does�it�make�much�sense�to�run�huge�export�and�current�account�surpluses?
• General�election�in�September�
Germany
Thoughts�on�the�German�election�(22�September)
• Angela�Merkel�is�popular,�no�strong�mood�for�change
• But:�Being�popular�doesn’t�assure�reͲelection�of�CDU/FDP�government
• A�new�party�to�watch:�”Alternative�für Deutschland“�(antiͲeuro)
• CDU/FDP�in�pole�position;�grand�coalition�and�SPD/Green�Party�coalition�possible
• Where�could�an�SPDͲled�government�make�a�difference?
– Economic�policy�(taxes,�social�security)� Æ less�businessͲfriendly– Management�of�the�euro�crisis� Æ ”more�Europe”,�less�austerity– Safe�heaven�status�of�Bunds Æ don’t�worry�too�much�
26
Germany
If�there�were�elections�next�Sunday�…
27
Germany
Source:�http://www.wahlrecht.de/umfragen/index.htm
The�Economist�on�Italy�and�France�
28
Italy,�France
No�easy�way�out�of�the�gloom�
• Nasty�mix�of�cyclical�and�structural�problems�
• Low�share�of�manufacturing�in�gross�value�added�(only�10%�compared�to�16.8%�in�Sweden�or�23%�in�Germany
• Low�profit�margins�in�the�industrial�sector,�concentrated�on�low/medium�valueͲadded�products,�…
• …�leading�to�a�high�priceͲelasticity�of�export�and�frequent�calls�for�weaker�euro
• Severe�loss�of�global�market�shares• Public�debt�issues,�rating�worries• Large�public�sector�but�low�efficiency�of�
government�activity�(eg in�education)• Expect�no�growth�for�2013�
29
France
Source: Nordea Markets and Reuters Ecowin
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14-6
-4
-2
0
2
4
6
40
60
80
100
120
140% y/yGDP and business climateIndex
GDP, rhs
INSEE business climate
Source: Nordea Markets and Reuters Ecowin
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 1450
60
70
80
90
100
-8
-7
-6
-5
-4
-3
-2
-1
0
1 % of GDP
Note: EuropeanCommission forecast
General government debt, rhs
Public finances% of GDP
General government budget balance
Italy:�new�government faces old�problems
• Six�consecutive�quarters�of�declining�GDP…�
• …�which�is�now�as�high�(or�low)�as�it�was�in�2001��
• Italian�voters�clearly�rejected�austerity�in�late�February�…
• …�and�it�took�two�months�to�form�a�new�(grand�coalition)�government�
• GDP�to�decline�by�another�1¼%�this�year,�with�not�much�growth�in�2014�either���
30
Italy
Source: Nordea Markets and Reuters EcoWin
04 05 06 07 08 09 10 11 12 13-90
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
-90
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20Balance
Portugal
Greece
Consumer sentiment
Spain
Balance
Italy
Germany
Source: Nordea Markets and Reuters Ecowin
05 06 07 08 09 10 11 12 13-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5
-10.0
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5EURbn
Ireland
Italy
Trade balance
Greece
EURbn
Portugal
Spain
Note: primitive seasonal adjustment
Spain�adapting to�the�postͲbubble environment
• Typical�case�of�a�protracted�”balance�sheet�recession”:�
• Credit�boom�Æ assets�prices�n then�thebubble�bursts�Æ private�sector�deleverages�Æ savings�nÆ consumption,�investment�pÆ asset�prices�pÆ bad�loans�nÆ public�deficits�n
• Government�debt�rose�from�36%�of�GDP�in�2007�to�84%�in�2012
• Public�sector�deficit�still�10.6%�in�2012�(mainly�structural)�
• As�monetary�policy�doesn’t�work,�either�fiscal�policy�should�give�stimuli�(if�it�can),�or�recovery�has�to�come�from�exports�via�nominal�or�real�deprecation�
31
Spain
Spain:�housing correction going on,�exports brighter
• Downsizing�of�the�housing�sector�began�in�2008�– and�it’s�not�over�yet�
• Construction�investment�down�45%�since�2008�(GDP:only Ͳ7%)
• House�prices increased by�145%�from�2000�to�2007�and�declined by�only 17%�since
• Employment�down�19%�overall�and�62%�in�the�oversized�construction�sector�…
• …�and�it�hasn’t bottomed out�yet• Exports�the�brighter�spot,�both�goods�and�
services• GDP�forecast (2013/14):�Ͳ1.5%�/�0.9%
32
Spain
Slovenia�– vulnerable�but�very�different�from�Cyprus
• Banks are�struggling�with�the�second�recession�since�2009�and�sinking�house�prices�
• Bad�loans:�€ 7�bn according�to�IMF,�20%�of�GDP
• Economy�is�likely�to�shrink�by�around�2%�this�year.�So,�no�shortͲterm�relief�from�this�side
• Slovenia�may�need�external�help�but�it�is�very�different�from�Cyprus:�– Small�banking�sector,�less�need�for�bank�recapitalization�(far�below�10%�of�GDP)– State�as�majority�owner�of�the�banking�system�has�a�strong�interest�in�taking�part�in�
capital�increase– Public�debt�only�53.7%�of�GDP�(2012).�Cyprus:�86.5%– Economic�structure�much�healthier�than�in�Cyprus.�Industry�accounts�for�30%�of�gross�
value�added
Conclusion:• Should�investors�worry�about�Slovenia�and�follow�events�closely?�Yes• Will�Slovenia�be�the�next�Cyprus?�No• As�long�as�crisis�management�doesn’t�get�it�completely�wrong,�it�is�more�likely�to�be�a,�well,�
“normal”�case�of�crisis�– and�that�would�be�bad�enough
33
Ͳ0.75
Ͳ0.50
Ͳ0.25
0.00
0.25
0.50
0.75
35
40
45
50
55
60
65
99 01 03 05 07 09 11 13
Source: Nordea Markets and Reuters Ecowin
PMI compositeoutput
Index bpPMI and ECB policy changes
Change in ECBmain refi rate (rhs)
ECB�“ready�to�act”�but�running�out�of�options
• The�latest�rate�cut�will�not�change�the�economic�outlook�much�…• …�and�it�will�not�ease�fragmentation�in�bank�lending¾ Monetary�policy�is�increasingly�”pushing�on�a�string”�
34
ECB
Source: Nordea Markets and Reuters Ecowin
03 04 05 06 07 08 09 10 11 123.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0 %Medium term interest rates on small loans%
GermanySpainFranceNetherlandsItaly
Fixing�the�monetary�transmission�mechanism�– but�how?
• Further�measures�to�support�lending�to�SMEs�are�likely,�e.g.:�– further/cheaper�liquidity�to�banks�that�lend�more�to�SMEs
– softer�rules�on�SME�loans�as�collateral�
• Don’t�expect�too�much�positive�effect
35
ECB
Key�takeͲaways
36
• Anyone�who�claims�that�he�knows�exactly�what�will�happen�with�the�euro�crisis�(and�when)�does�not�tell�you�the�truth
• Slow�and�bumpy�growth�ahead�for�the�Euro�area
• Wide�differences�between�EuroͲarea�economies�and�bond�yields�to�persist�
• ECB effective�in�avoiding�disaster�but�with�no�silver�bullet�to�kickͲstart�the�economy�
• Full�Banking�Union�will�not�arrive�quickly
• If�growth�does�not�return�by�2014�at�the�latest,�political�capital�risks�getting�exhausted�which�would�make�a�EuroͲarea�breakͲup�possible�
• Euro�weaker�vs.�the�dollar�over�time
• Return�of�capital�(not�on capital)�likely�to�stay�on�investors’�minds
Summary
• Annex�of�tables�• Key�forecasts
37
Global�Macro�forecasts
38
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
European�macro forecasts
39
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
Euro Area: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014E
Private consumption 5,134 0.9 0.1 -1.2 -0.5 0.8Government consumption 1,988 0.7 -0.1 -0.1 0.0 0.5Fixed investments 1,731 -0.3 1.6 -3.9 -1.0 5.7Exports 3,285 11.0 6.5 2.9 2.5 7.3Imports 3,167 9.5 4.3 -0.9 2.0 8.0Net exports* 118 0.7 0.9 1.6 0.2 -0.1GDP 2.0 1.5 -0.5 -0.4 1.4Nominal GDP, EUR bn 8,920 9,176 9,421 9,483 9,578 9,770
Unemployment rate, % 10.1 10.2 11.4 11.7 11.4Consumer prices, % y/y 1.6 2.7 2.5 1.6 1.6Current account, % of GDP 0.3 0.2 1.5 2.2 2.3General government budget balance, % of GDP -6.2 -4.1 -3.6 -2.8 -2.7General government gross debt, % of GDP 85.6 88.1 93.1 95.1 95.2
European�macro forecasts
40
Annex tables
Germany: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014E
Private consumption 1,391.6 0.8 1.7 0.6 0.5 1.0Government consumption and investment 475.3 1.7 1.0 1.4 1.3 1.0Fixed investment 408.7 5.6 6.4 -1.9 3.2 6.7Exports 1,006.5 13.4 7.9 4.3 2.4 6.0Imports 889.6 10.9 7.5 2.2 3.6 6.7Net exports* 116.9 1.6 0.6 1.2 -0.4 0.2GDP 4.0 3.1 0.9 0.7 2.1Nominal GDP (EURbn) 2,374.5 2,496.2 2,592.6 2,643.9 2,696.8 2,764.2
Unemployment rate, % 7.7 7.1 6.8 6.8 6.5Consumer prices, % y/y 1.2 2.5 2.1 1.5 1.7Current account, % of GDP 6.1 5.6 6.3 6.0 5.6General government budget balance, % of GDP -4.1 -0.8 0.2 -0.5 0.2Gross public debt, % of GDP 82.5 80.5 81.6 80.7 78.3
Source:�Nordea�Markets�and�Reuters�Ecowin
European�macro forecasts
41
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
France: Macroeconomic indicators (% annual real changes unless otherwise noted)2009 (EURbn) 2010 2011 2012 2013E 2014E
Private consumption 1,029 1.5 0.3 0.0 0.0 0.8Government consumption and investment 436 1.7 0.2 1.4 1.0 0.5Fixed investment 330 1.0 3.5 0.0 -0.7 2.4Exports 427 9.2 5.5 2.3 1.0 4.3Imports 469 8.4 5.2 -0.3 0.5 4.0Net exports* -42 0.0 0.0 0.7 0.2 0.1GDP 1.6 1.7 0.0 0.0 1.2Nominal GDP (EURbn) 1,886 1,936 1,995 2,028 2,048 2,089
Unemployment rate, % 9.7 9.6 10.3 10.7 10.3Consumer prices, % y/y 1.7 2.3 2.2 1.6 1.7Current account, % of GDP -2.0 -2.6 -1.9 -1.6 -1.8General government budget balance, % of GDP -7.1 -5.2 -4.6 -3.8 -4.1Gross public debt, % of GDP 82.3 86.0 90.3 93.4 95.0
FX�forecasts
42
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
Rates�forecasts
43
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
The�Euro�area compared to�USA,�Japan,�China�
44
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
Euro�area USA Japan China
Population 2011 m 331.9 311.6 126.2 1,347.4Nominal �GDP 2011 bn�€ 9,425.3 10,842.1 4,233.9 5,247.6������in�%�of�Eurozone�GDP 2011 % 100.0 115.0 44.9 55.7Nominal �GDP�per�capita 2011 €1,000 28.4 34.8 33.6 3.9������in�%�of�GDP�Eurozone�per�capita 2011 % 100.0 122.5 118.2 13.7Nominal �GDP�per�capita�(PPP) 2011 €1,000 24.3 34.8 25.0 6.0������in�%�of�GDP�Eurozone�per�capita 2011 % 100.0 143.2 102.8 24.8Share�in�WorldͲGDP�(nominal) 2011 % 18.7 21.6 8.4 10.5Share�in�WorldͲGDP�(PPP) 2011 % 14.2 19.1 5.6 14.3Share�in�the�real �GDP�����Private�consumption 2011 % 56.4 70.9 59.1 35.4�����Gross�fixed�capital �formation 2011 % 19.0 12.8 19.5 44.8�����Public�comsumption 2011 % 21.4 19.0 19.6 12.8�����Net�exports 2011 % Ͳ0.1 Ͳ3.1 2.6 5.6Shares �in�gross�value�added�����Agriculture 2011 % 1.7 *�1,2 *�1,2 10.1�����Industry�(including�construction�industry) 2011 % 25.5 *�20,0 *�28,1 46.8�����Services 2011 % 72.8 *�78,8 *�70,7 43.1Real �GDP 2007�to�2011 %�y/y,�p.a. 0.5 0.5 Ͳ0.1 10.7Consumer�prices 2008�to�2011 %�y/y,�p.a. 2.0 2.2 Ͳ0.2 3.7Unemployment�rate 2009�to�2011 % 9.0 7.7 4.5 4.1Government�budget�balance 2011 %�of�GDP Ͳ4.1 Ͳ10.1 Ͳ9.8 Ͳ1.2Government�debt 2011 %�of�GDP 88.0 102.9 229.6 25.8Current�account�balance 2011 %�of�GDP 0.2 Ͳ3.1 2.1 2.8Share�of�global �exports � 2011 % 13.6 8.3 4.6 10.7Share�of�global �imports � 2011 % 13.3 12.4 4.6 9.5
*�Data �for�2010
GDP:�Total,�per�capita and�composition
45
Annex tables
Source:�Nordea�Markets�and�Reuters�Ecowin
Nominal�GDP
Share�in�Eurozone�
GDPPopulation
��1,000�€� PPP�1) Agriculture Industry ServicesPrivate�
consumpͲ��tion
Public�consumpͲ�
tion
Gross�fixed�capital�
formationExport Import
bn�€ �%� mGermany 2,593 27.5 81.8 31.7 111 1.0 30.1 68.9 55.5 19.0 17.8 50.2 43.8France 1,995 21.2 65.1 30.7 99 1.8 18.7 79.5 56.8 24.7 19.2 27.3 29.7Italy 1,580 16.8 60.6 26.1 94 2.0 24.6 73.4 57.8 21.0 18.7 28.5 28.3Spain 1,063 11.3 46.0 23.0 92 2.6 28.3 69.1 59.4 22.6 28.3 34.8 36.2Netherlands 602 6.4 16.6 36.1 121 1.8 24.8 73.4 46.0 27.0 17.9 79.8 70.4Belgium 370 3.9 11.0 33.6 109 0.6 22.9 76.5 50.5 24.0 20.4 82.8 80.6Austria 301 3.2 8.4 35.8 119 1.6 29.8 68.6 52.2 18.1 21.2 59.4 54.2Greece 209 2.2 11.3 18.4 76 3.1 18.0 78.9 72.1 18.8 13.1 22.0 29.1Finland 189 2.0 5.4 35.2 107 2.9 27.8 69.3 50.2 19.4 19.3 47.6 42.4Portugal 171 1.8 10.6 16.2 71 2.1 23.3 74.6 65.5 20.4 18.8 39.2 44.1Ireland 159 1.7 4.5 34.8 118 1.7 31.3 67.0 50.5 15.8 10.3 104.5 80.6Slovakia 69 0.7 5.4 12.8 68 3.2 41.9 54.9 54.3 16.7 24.0 91.7 84.9Luxembourg 43 0.5 0.5 0.1 254 Ͳ Ͳ Ͳ 33.8 17.2 22.9 182.0 160.1Slovenia 36 0.4 2.1 17.6 78 2.5 29.7 67.8 52.6 19.0 19.2 77.7 75.1Cyprus 18 0.2 0.8 21.2 85 2.4 17.1 80.5 68.3 19.7 17.4 45.5 50.4Estonia 16 0.2 1.3 11.9 62 3.6 30.2 66.2 57.9 18.2 24.7 95.2 89.5Malta 6 0.1 0.4 15.7 77 1.8 18.1 80.1 64.5 19.6 13.4 100.1 96.0
Eurozone 9,421 100.0 332.0 28.4 100 1.7 25.5 72.8 55.8 21.3 18.9 42.9 40.61)�Euro�area �=�100�
%
GDP�per�capita Shares�in�gross�value�added Shares�in�the�real�GDP
index %
Government�budget�balance,�%�of�GDP
46
Source:�Nordea�Markets,�Reuters�Ecowin,�IMF
Annex tables
1999 2003 2004 2005 2006 2007 average�2003/07
2008 2009 2010 2011 2012 average�2008/12
2013 2014
Germany Ͳ1.6 Ͳ4.2 Ͳ3.8 Ͳ3.3 Ͳ1.7 0.2 Ͳ2.5 Ͳ0.1 Ͳ3.1 Ͳ4.1 Ͳ0.8 0.2 Ͳ1.6 Ͳ0.2 0.0
France Ͳ1.8 Ͳ4.1 Ͳ3.6 Ͳ3.0 Ͳ2.4 Ͳ2.8 Ͳ3.2 Ͳ3.3 Ͳ7.6 Ͳ7.1 Ͳ5.2 Ͳ4.6 Ͳ5.6 Ͳ3.8 Ͳ4.1
Italy Ͳ2.0 Ͳ3.6 Ͳ3.6 Ͳ4.5 Ͳ3.4 Ͳ1.6 Ͳ3.3 Ͳ2.7 Ͳ5.4 Ͳ4.3 Ͳ3.8 Ͳ2.8 Ͳ3.8 Ͳ2.0 Ͳ1.9
Spain Ͳ1.2 Ͳ0.4 Ͳ0.1 1.3 2.4 1.9 1.0 Ͳ4.5 Ͳ11.2 Ͳ9.7 Ͳ9.4 Ͳ10.2 Ͳ9.0 Ͳ6.7 Ͳ7.2
Netherlands 0.4 Ͳ3.2 Ͳ1.8 Ͳ0.3 0.5 0.2 Ͳ0.9 0.5 Ͳ5.6 Ͳ5.0 Ͳ4.4 Ͳ4.0 Ͳ3.7 Ͳ3.5 Ͳ3.5
Belgium Ͳ0.7 Ͳ0.2 Ͳ0.2 Ͳ2.6 0.3 Ͳ0.1 Ͳ0.6 Ͳ1.1 Ͳ5.6 Ͳ3.8 Ͳ3.7 Ͳ3.9 Ͳ3.6 Ͳ3.1 Ͳ3.4
Austria Ͳ2.4 Ͳ1.7 Ͳ4.6 Ͳ1.8 Ͳ1.7 Ͳ1.0 Ͳ2.1 Ͳ1.0 Ͳ4.1 Ͳ4.5 Ͳ2.5 Ͳ3.0 Ͳ3.0 Ͳ2.5 Ͳ1.8
Greece Ͳ3.1 Ͳ5.7 Ͳ7.4 Ͳ5.6 Ͳ6.0 Ͳ6.8 Ͳ6.3 Ͳ9.9 Ͳ15.6 Ͳ10.8 Ͳ9.5 Ͳ10.3 Ͳ11.2 Ͳ8.5 Ͳ7.3
Finland 1.7 2.5 2.3 2.7 4.1 5.3 3.4 4.3 Ͳ2.7 Ͳ2.8 Ͳ1.1 Ͳ1.9 Ͳ0.8 Ͳ1.7 Ͳ1.4
Portugal Ͳ3.1 Ͳ3.7 Ͳ4.0 Ͳ6.5 Ͳ4.6 Ͳ3.2 Ͳ4.4 Ͳ3.7 Ͳ10.2 Ͳ9.8 Ͳ4.4 Ͳ5.0 Ͳ6.6 Ͳ4.9 Ͳ2.9
Ireland 2.5 0.4 1.4 1.7 2.9 0.1 1.3 Ͳ7.4 Ͳ13.9 Ͳ30.9 Ͳ13.3 Ͳ7.7 Ͳ14.6 Ͳ7.3 Ͳ4.2
Slovakia Ͳ7.4 Ͳ2.8 Ͳ2.4 Ͳ2.8 Ͳ3.2 Ͳ1.8 Ͳ2.6 Ͳ2.1 Ͳ8.0 Ͳ7.7 Ͳ4.9 Ͳ4.8 Ͳ5.5 Ͳ3.3 Ͳ3.4
Luxembourg 3.4 0.5 Ͳ1.1 0.0 1.4 3.7 0.9 3.2 Ͳ0.8 Ͳ0.8 Ͳ0.3 Ͳ1.5 Ͳ0.1 Ͳ0.9 Ͳ1.3
Slovenia Ͳ3.0 Ͳ2.7 Ͳ2.3 Ͳ1.5 Ͳ1.4 0.0 Ͳ1.6 Ͳ1.9 Ͳ6.0 Ͳ5.7 Ͳ6.4 Ͳ4.4 Ͳ4.9 Ͳ5.1 Ͳ4.7
Cyprus Ͳ4.3 Ͳ6.6 Ͳ4.1 Ͳ2.4 Ͳ1.2 3.5 Ͳ2.2 0.9 Ͳ6.1 Ͳ5.3 Ͳ6.3 Ͳ5.5 Ͳ4.5 Ͳ4.5 Ͳ3.8
Estonia Ͳ3.5 1.7 1.6 1.6 2.5 2.4 2.0 Ͳ2.9 Ͳ2.0 0.2 1.2 Ͳ0.5 Ͳ0.8 Ͳ0.3 0.2
Malta Ͳ6.9 Ͳ9.0 Ͳ4.6 Ͳ2.9 Ͳ2.7 Ͳ2.3 Ͳ4.3 Ͳ4.5 Ͳ3.8 Ͳ3.6 Ͳ2.7 Ͳ2.6 Ͳ3.4 Ͳ2.9 Ͳ2.5
Euro�area Ͳ1.5 Ͳ3.2 Ͳ2.9 Ͳ2.5 Ͳ1.4 Ͳ0.7 Ͳ2.1 Ͳ2.1 Ͳ6.3 Ͳ6.2 Ͳ4.2 Ͳ3.7 Ͳ4.5 Ͳ2.8 Ͳ2.7
USA #N/A Ͳ4.9 Ͳ4.4 Ͳ3.2 Ͳ2.0 Ͳ2.7 Ͳ3.5 Ͳ6.7 Ͳ13.3 Ͳ11.2 Ͳ10.1 Ͳ8.7 Ͳ10.0 Ͳ7.3 Ͳ5.6
UK 0.9 Ͳ3.4 Ͳ3.5 Ͳ3.4 Ͳ2.7 Ͳ2.8 Ͳ3.2 Ͳ5.0 Ͳ11.4 Ͳ10.2 Ͳ7.8 Ͳ6.3 Ͳ8.1 Ͳ7.4 Ͳ6.0
Japan Ͳ7.8 Ͳ7.8 Ͳ5.9 Ͳ4.8 Ͳ3.7 Ͳ2.1 Ͳ4.9 Ͳ4.1 Ͳ10.4 Ͳ9.4 Ͳ9.8 Ͳ10.0 Ͳ8.7 Ͳ9.1 Ͳ7.2
Government�debt,�%�of�GDP
47
Source:�Nordea�Markets,�Reuters�Ecowin,�IMF
1999 2003 2004 2005 2006 2007 average�2003/07
2008 2009 2010 2011 2012 average�2008/12
2013E 2014E
Germany 61.3 64.4 66.2 68.5 68.0 65.2 66.5 66.8 74.5 82.5 80.4 81.9 77.2 80.7 78.3
France 58.9 63.2 65.0 66.7 64.0 64.2 64.6 68.2 79.2 82.3 86.0 90.3 81.2 93.4 95.0
Italy 113.0 103.9 103.4 105.7 106.3 103.3 104.5 106.1 116.4 119.2 120.7 127.1 117.9 128.1 127.1
Spain 62.4 48.8 46.3 43.2 39.7 36.3 42.8 40.2 53.9 61.5 69.3 88.4 62.6 95.8 101.0
Netherlands 61.1 52.0 52.4 51.8 47.4 45.3 49.8 58.5 60.8 63.1 65.5 70.8 63.7 73.8 75.0
Belgium 113.6 98.4 94.0 92.0 88.0 84.0 91.3 89.2 95.7 95.5 97.8 99.8 95.6 100.8 101.1
Austria 66.8 65.3 64.7 64.2 62.3 60.2 63.3 63.8 69.2 72.0 72.4 74.3 70.3 75.2 74.5
Greece 94.0 97.4 98.9 101.2 107.5 107.2 102.4 112.9 129.7 148.3 170.6 161.6 144.6 175.6 175.2
Finland 45.7 44.5 44.4 41.7 39.6 35.2 41.1 33.9 43.5 48.6 49.0 53.4 45.7 56.4 57.6
Portugal 51.4 59.4 61.9 67.7 69.4 68.4 65.4 71.7 83.2 93.5 108.0 120.6 95.4 123.9 124.7
Ireland 47.0 30.7 29.5 27.3 24.6 25.0 27.4 44.5 64.9 92.2 106.4 117.2 85.0 122.2 120.1
Slovakia 47.8 42.4 41.5 34.2 30.5 29.6 35.6 27.9 35.6 41.0 43.3 52.4 40.0 55.1 57.1
Luxembourg 6.4 6.1 6.3 6.1 6.7 6.7 6.4 14.4 15.3 19.2 18.3 20.5 17.6 22.2 24.1
Slovenia 24.1 27.2 27.3 26.7 26.4 23.1 26.2 22.0 35.0 38.6 46.9 53.7 39.2 59.5 63.4
Cyprus 59.3 69.7 70.9 69.4 64.7 58.8 66.7 48.9 58.5 61.3 71.1 86.5 65.3 93.1 97.0
Estonia 6.5 5.6 5.0 4.6 4.4 3.7 4.7 4.5 7.2 6.7 6.1 10.5 7.0 11.8 11.3
Malta 55.2 66.0 69.8 68.0 62.5 60.7 65.4 60.9 66.3 67.4 70.4 73.1 67.6 73.8 73.6
Euro�area 71.6 69.2 69.6 70.3 68.7 66.4 68.9 70.2 80.0 85.6 88.1 93.1 83.4 95.1 95.2
USA 60.8 60.4 68.3 67.9 66.6 67.2 66.1 76.1 89.7 98.6 102.9 107.2 94.9 111.7 113.8
UK 43.6 39.1 41.0 42.2 43.3 44.2 42.0 52.3 67.8 79.4 85.2 89.8 74.9 95.4 97.9
Japan 131.9 169.6 180.7 186.4 186.0 183.0 181.1 191.8 210.2 215.3 229.6 236.6 216.7 245.0 246.2
Annex tables
Global�Competitiveness�Index�Ͳ Ranking�(2012/2013)
48
Annex tables
Source:�Nordea�Markets�and�World�Economic�Forum
1.�Institutions
2.�InfraͲ���structure
3.�MacroͲ���economic�
environment
4.�Health�and�primary�education
5.�Higher�education�and�training
6.�Goods�market�
efficiency
7.�Labor�market�
efficiency
8.�Financial�market�
development
9.�TechnoͲ���logical�
readiness
10.�Market�size
11.�Business�sophistication
12.�Innovation
Switzerland 1 5 5 8 8 3 7 1 9 6 39 2 1Germany 6 16 3 30 22 5 21 53 32 15 5 3 7France 21 32 4 68 21 27 46 66 27 14 8 21 17Italy 42 97 28 102 25 45 65 127 111 40 10 28 36Spain 36 48 10 104 36 29 55 108 82 26 14 32 35Netherlands 5 7 7 41 5 6 6 17 20 9 20 4 9Belgium 17 27 21 66 2 4 15 50 31 22 27 12 11Austria 16 25 15 33 20 18 22 32 34 17 36 6 13Greece 96 111 43 144 41 43 108 133 132 43 46 85 87Finland 3 3 23 24 1 1 18 15 4 10 54 7 2Portugal 49 46 24 116 30 30 61 123 99 28 48 54 31Ireland 27 19 25 131 12 20 9 16 108 12 56 18 21Slovakia 71 104 56 54 42 54 54 86 47 45 59 61 89Luxembourg 22 9 12 12 28 44 4 37 12 2 92 23 18Slovenia 56 58 35 50 24 23 49 91 128 34 78 53 32Cyprus 58 40 39 117 9 32 33 44 38 37 106 52 53Estonia 34 30 41 20 27 25 31 10 39 25 96 51 30Malta 47 37 34 71 19 35 34 92 15 21 125 43 48USA 7 41 14 111 34 8 23 6 16 11 1 10 6UK 8 13 6 110 17 16 17 5 13 7 6 8 10Japan 10 22 11 124 10 21 20 20 36 16 4 1 5
1�=�best�conditions;�144�=�worst�conditions�below�144�surveyed�countries�of�the�World�Economic�Forum
Overall�Ranking
Basis�requirements Efficiency�enhancers Innovation�and�sophistication�factors
Ease�of�Doing�Business�Index�(2013)
49
Annex tables
Source:�Nordea�Markets�and�World�Bank
Starting�a�business
Dealing�with�construction�permits
Getting�electricity
Registering�property
Getting�������credit
Protecting�investors
Paying��������taxes
Trading�across�borders
Enforcing�contracts
Resolving�insolvency
Germany 20�(19) 106 14 2 81 23 100 72 13 5 19France 34�(29) 27 52 42 146 53 82 53 27 8 43Italy 73�(87) 84 103 107 39 104 49 131 55 160 31Spain 44�(44) 136 38 70 57 53 100 34 39 64 20Netherlands 31�(31) 67 89 67 49 53 117 29 12 32 6Belgium 33�(28) 44 57 82 176 70 19 75 29 18 7Austria 29�(32) 134 75 24 34 23 100 77 26 7 12Greece 78�(100) 146 31 59 150 83 117 56 62 87 50Finland 11�(11) 49 34 21 24 40 70 23 6 9 5Portugal 30�(30) 31 78 35 30 104 49 77 17 22 23Ireland 15�(10) 10 106 95 53 12 6 6 28 63 9Slovakia 46�(48) 83 46 100 8 23 117 100 98 69 38Luxembourg 56�(50) 93 33 63 134 159 128 14 32 1 52Slovenia 35�(37) 30 61 31 83 104 17 63 57 56 42Cyprus 36�(40) 37 80 98 99 53 32 31 18 108 25Estonia 21�(24) 47 35 53 14 40 70 50 7 31 72Malta 102�(Ͳ) 150 167 111 80 176 70 27 34 121 67USA 4�(4) 13 17 19 25 4 6 69 22 6 16UK 7�(7) 19 20 62 73 1 10 16 14 21 8Japan 24�(20) 114 72 27 64 23 19 127 19 35 1
1�=�best�conditions;�185�=�worst�conditions�among�185�countries�surveyed�by�the�World�BankReform�improves�conditions�for�doing�businessReform�worsens�conditions�for�doing�business
Overall�Ranking�2013�
(2012)
c�a�t�e�g�o�r�i�e�s�
Thank�you!
Dr.�Holger�SandteChief European�Analyst�
Global�Research+45�3333�1191
Nordea Markets�is�the�name�of�the�Markets�departments�of�Nordea Bank�Norge ASA,�Nordea Bank�AB�(publ),�Nordea Bank�Finland�Plc and�NordeaBank�Danmark A/S.
The�information�provided�herein�is�intended�for�background�information�only�and�for�the�sole�use�of�the�intended�recipient.�The�views�and�other�information�provided�herein�are�the�current�views�of�Nordea Markets�as�of�the�date�of�this�document�and�are�subject�to�change�without�notice.�This�notice�is�not�an�exhaustive�description�of�the�described�product�or�the�risks�related�to�it,�and�it�should�not�be�relied�on�as�such,�nor�is�it�a�substitute�for�the�judgement�of�the�recipient.
The�information�provided�herein�is�not�intended�to�constitute�and�does�not�constitute�investment�advice�nor�is�the�information�intended�as�an�offer�or�solicitation�for�the�purchase�or�sale�of�any�financial�instrument.�The�information�contained�herein�has�no�regard�to�the�specific�investment�objectives,�the�financial�situation�or�particular�needs�of�any�particular�recipient.�Relevant�and�specific�professional�advice�should�always�be�obtained�before�making�any�investment�or�credit�decision.�It�is�important�to�note�that�past�performance�is�not�indicative�of�future�results.�
Nordea Markets�is�not�and�does�not�purport�to�be�an�adviser�as�to�legal,�taxation,�accounting�or�regulatory�matters�in�any�jurisdiction.
This�document�may�not�be�reproduced,�distributed�or�published�for�any�purpose�without�the�prior�written�consent�from�Nordea Markets.
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