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CoFEE| 25.10.2019
„CRYSTAL BALL” PANEL –WHAT DOES THE NEW EUROPEAN POLITICAL SETTING
MEAN FOR THE CENTRAL EUROPEAN ECONOMIES?
Barnabás Virág | Executive Director
2 |
AFTER 7 GOOD YEARS – SUBDUED GROWTH IN THE EZ, ROBUST GROWTHIN THE CEE REGION
Source I MNB
Average GDP growthsince 2013
3 |
THE FISCAL SPACE IS LIMITED WHERE MOST NEEDED, BUT MORE ROOM FORMANOEUVRE IN CENTRAL EUROPE
Source | Eurostat
Eurozone
Club Med
V4 countries
134.6%
86.4%
2019 Q2
49.5%
Government debt aspercentage of GDP
4 |
EUROPEAN BANKS GENERALLY UNDERPERFORM THEIR GLOBAL PEERS
Source I SNLEU and Japanese banks deliver poor growth performance
while profitability does not keep up with COE
US and Chinese banks show high profitability besides
robust credit growth
Note: Size of bubble denotes total asset volume (2018)
European banksUS banksChinese banksJapanese banks
5 |
THE EUROPEAN COMPETITIVENESS IS LAGGING BEHIND
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
USA EU4 (DE, FR, IT, ES) average China - right hand scale
Ranking Ranking
Source | WORLD BANK
6 |
EUROPE IS IN A TIGHT CORNER: GLOBAL TRADE AND POLITICAL TENSIONS
Source I MNB
?BREXIT
TRADE TENSION
7 |
NEW CHALLENGES AHEAD OF US COULD EASILY RESHAPE OUR WORLD
DEMOGRAPHY
CLIMATE
TECHNOLOGY
The old-age dependency ratio in the EU: from thecurrent ~30% will rise to 49.9 % by 2050 To comply with the
2 Celsius degree climate scenario, the world would need investments amounting to around 7 trillion USD per year. This is nearly 2 times the overall EU28 investment.
Google claims quantumsupremacy
Smart factory in Nanjing –„Robots make robots”
Source I MNB
8 |
QUESTIONS FOR DISCUSSION
1) The current stance of European Uniono Is Europe better-prepared for the next crisis?
o What are the main consequences of the May 2019 European elections?
o The euro is still an incomplete project. What are the most important steps tostrengthen the unity?
2) Geopoliticso How can Europe define itself in a new bipolar, G2-like world?
o What are the key implications for the CEE region?
3) Climate change and technological revolutiono How can the EU react on the issue of climate change?
o What should the EU do to keep up with the technological revolution?
THANK YOU FOR YOUR ATTENTION!
