German Policies against Financial Crisis 2008-2009

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GermanyEconomic Crisis 2008-09

Lecturer: LAMUNN Soliel

Room: 41

Economics and FinanceInstitute

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1. YANG Maria

2. RITH Ravitou

3. YIM Muddhita

4. YUN Sopheaktra

5. YA Chansopheakdey

6. VANNY Vansithsathya

Group Members

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Content

I. Germany

II. Economic Crisisin 2008-2009

1. RootCause

2. Consequences

3. Policies

III. Germany AfterCrisis

IV. Conclusion

V. Bibliography

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Geography

Language

Religion

Currency

Government

Economy

Central Bank

I. Germany

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1. RootCauseHype in the housing markets ofthe United States was

the root of the crisis

,So how did it become global economic crisis?

II.Economic Crisis

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1. Root Cause

Crisis in U.S

1. Subprime Loan

Highrisk Low-incomedebtor

Highinterestrate

Flexibleinterestrate

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1. Root Cause

2. Subprime Loan crisis:

Priceof realestate

Interestrate

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1. Root Cause

3. Form subprime Crisis to Financial Crisis

Sellof subprimeloan

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1. Root Cause

4. From Financial Crisis to Economic Crisis

Banksaswellasinsurance companieswereaffected.

CreditCrunch

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2.Consequences

}Affectedeconomic activitiesin Germany:

} Internationaltrade

}Consumptionandexpenditure

} Unemployment

} SME

} Etc.

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GDP

2.Consequences

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GDP Per Capita

2.Consequences

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Unemployment

2.Consequences

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Export

2.Consequences

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Import

2.Consequences

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3.Policies

} Policiesadoptedby Berlin Authorities:

} Stimulus Package I

}

Stimulus Package II

} SpecialFundFinancialMarketStabilization

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3.Policies

1. Stimulus Package I

o Adoptedon 5 Nov 2008

o Worth 70bneuros

o Takentoensure jobsandeconomic growththrough:

o Boostingprivateandpublic investment

o Easingeconomic situationof citizensandbusinesses

o Reviving consumption

o Ensuringemployment

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3.Policies

1. Stimulus Package I

o Themostimportantmeasuresincluded:

o Subsidies forshorthourwork

o Automotivesupport

o CredittoSME

o Taxrelief, of about 25%, forfixedassets

o Enhancementof regionalinfrastructure

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3.Policies

2. Stimulus Package II

o Adoptedon 13th Feb 2009

o

Worth 50bneuros

o Wasintendedprimarilyto:

Provide jobs

Strengthenthemiddle class &

Increase cohesionandprogressinsociety

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3.Policies

2. Stimulus Package II

o Themostimportantmeasuresincluded:

Loanstolargeenterprises

LoanstoSME

Purchaseof new cars

Investmentininfrastructureandeducation

Theenergetic buildingrefurbishmentandresearchprograms

Enhancementof traffic infrastructure

Modernizationof hospitalitiesandurbandevelopment

Modernizationof education

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3.Policies

3. Special Fund Financial Market Stabilization

o WhatisSoFFin?

Anagencyatthe GermanFederal BanksupervisedbytheFederalMinistryof Finance

o WhatareSoFFins tasks?

Guarantees Recapitalization Assumptionof riskpositions

o HowdoesSoFFin finance?

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III. After Crisis

}German economic development after crisis:

}Growthrateof real GDP

}

Growthof export

} domestic consumptionrecovery Growthof import

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0

4

2

6

-2

-4

-6

-8

2006 2007 2008 2009 2010

III. After Crisis

GDP evolution compared to same quarter of previous year (in %)

Source: Federal Statistical Office

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IV. Conclusion

o ItwasU.Swherethe crisisstarted.

o Butothercountriesincluding Germanywereaffected.

o Tomaintainsustainabilityandgrowth, Germanyadopted:

o Stimulus Package Io Stimulus Package IIo SpecialFundFinancialMarketStabilization

o Astheresult, thepolicieshavebrought Germanybotheconomic growthanddevelopment.

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V. Reference

} Symposiumon Governmental Assistance for Industriesand Business, Tokyo-Dec

16, 2009, Germanys response to the financial Crisis,www.rieti.go.jp/jp/events/09121601/pdf/1-2-E_Henrot_PPT_o.pdf

} HODOROGEL G. RoxanaandCHIRA Robert , Post-crisis Situation ofGerman Economy under Analysis, www.rmci.ase.ro/no12vol4/19.pdf

} Sher Verick and Iyanatul Islam, May 2010, The Great Recession of 2008-2009:Causes, Consequences and Policy Responses, ftp.iza.org/dp4934.pdf

} HODOROGEL G. RoxanaandCHIRA Robert, Bucharest Academyof EconomicStudies, German SMEs Affected by the World Crisis,[email protected]

}

Asmussen Jorg, thestatesecretaryof theFederalMinistryof FinanceinGermany, The Washington Quarterly, 32:3pp. 197_204, July 2009,Mastering Global Financial Crises: A German Perspective,www.twq.com/09july/docs/09jul_Asmussen.pdf

} AhrensSteffen, Kiel Institute forthe World Economy, No. 11October2009,Fiscal Responses to the Financial Crisis, www.ifw

kiel.de/wirtschaftspolitik/.../kiel.../kiel_policy_ brief_11.pdf 25


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Thanks For Your KindAttention!

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Questions?

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German Policies against Financial Crisis 2008-2009