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Voorkomen "nieuwe" fiscale regels volgende euro-crisis ? (2):It is private leverage, stupid!
Onze vorige post over de nieuwe fiscale regels voor de Eurozone (het "Fiscal Compact") stelde dat de "nieuwe regels" (o.a. de beperking van begrotingstekorten tot 3% van het BNP) nauwelijks verschillen van de "oude regels" van het Groei- en Stabiliteitspact (GSP). Het GSP werd niet nageleefd en voorzag geen prikkels voor zuinigheid in "vette jaren". Waarom zou het "Fiscal Compact" dan nu wel worden nageleefd? En waarom zouden de lidstaten nu wel zuinig zijn in hoogconjunctuur?
Dit artikel toont aan dat schulden in de privé-sector ook heel erg belangrijk waren als overheidsschuld in het veroorzaken van de huidige landencrisis.
Sinds de invoering van de euro en voor het losbarsten van de "Grote 2008-2012 Recessie", daalde de overheidsschuld binnen de eurozone het sterkst in Spanje en Ierland (figuur 1). In Spanje en Ierland (en in zekere mate ook Italië) is de stijgende privé-schuld de hoofdoorzaak van hun landencrisis (figuur 2). Omwille van de onbetrouwbare statistieken voor Griekenland, ontbreekt Griekenland op figuur 2. Toch illustreren Griekenland en Portugal het gevaar van een hoge overheidsschuld.
Figuur 1: Evolutie overheidsschuld 1999-2007
Bron: Muscatelli, Natale,Tirelli (2010)
Figuur 2: Privé- vs. overheidsschuld
De historisch lage reële rente in Spanje & Ierland, een gevolg van het met de euro tijdelijk quasi- verdwijnen van de risicopremie (figuur 3) en de relatief hoge inflatie, zwengelde er een huiszeepbel aan. Zodra de huizenprijzen in elkaar stuikten (met ongeveer 40%), wilden de gezinnen hun vermogen terug opbouwen. Dus bouwden ze massaal hun schuld af, spaarden ze meer en consumeerden ze minder. Door deze "private deleveraging" daalde het BNP er spectaculair (figuur 4) en dus ook de belastinginkomsten.
Samen met de zeepbel zakten ook de balansen van heel wat banken in elkaar. Volgens Eurostat bedroeg de negatieve impact van de overheidssteun aan de excessief geleveragede Ierse banken op het Ierse overheidstekort in 2010 niet minder dan 23% van het BNP!
Figuur 3: Nominaal rendement overheidsschuld 10 jaar
Figuur 4: Cumulatieve groei BNP
Bron: Brunnermeier (2011)
Deze excessieve privé- schulden (voor 2007) en de daardoor lagere belastingsinkomsten (na 2007) vormen de hoofdoorzaak voor de Spaanse landencrisis. Een belangrijk deel van de stijgende privé-schuld werd gefinancierd door buitenlandse investeerders en diende om de handelstekorten te financieren. Die handelstekorten waren op hun beurt een rechtstreeks gevolg van de stijgende competitiviteitskloof van "het Zuiden" tov van "het Noorden" (figuur 5).
De huidige terechte aandacht voor overheidsschuld mag niet ten koste gaan van structurele Europese maatregelen om excessieve gezinsschulden te voorkomen, de competiviteitskloof en het Europese bankenprobleem aan te pakken.
Figuur 5: Productiviteitskloof
Bron: Goldman Sachs
Lage overheidsschulden zijn absoluut een legitiem doel. Toch is het terugdringen van de overheidsschuld onvoldoende om de "volgende eurocrisis" te voorkomen. Excessieve gezinsschulden, de competiviteitskloof en het Europese bankenprobleem moeten nu dringend op Europees niveau worden aangepakt.
12 Comments
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Theo
On 11 Jan, 2012
A very informative series of articles by Daan.
I have a question.
Thus far we have seen that economies have been brought down by one of two things - either property markets funded with hot money or financial institutions which have become too big relative to the economy they are located in.
Fiscal measures on the whole have been created and are successful in the case of a closed national economy.
How can proper national fiscal measures even be devised to deal with complex international systems of flows and stocks?-
christof Govaerts
On 11 Jan, 2012
@Theo
As usual a very good point : when capital is perfectly mobile, you could indeed have a problem in cooling off potential hot flows spoiling the domestic fun and blowing bubbles you don't want to have ; various emerging market countries have already taken measures to curb these trends by means of taxing incoming flows.-
Theo
On 11 Jan, 2012
@Christof
Unlike EMs, the EZ has all its budgets and fiscal measures benchmarked against GDP growth.
Is this why GDP growth is now more critical to EZ than EMs?
I don't see EMs having much trouble rebalancing or changing direction for a while... for the EZ it's a dead end.
According to OECD Belgian real estate market (majority of private debt I guess) is on average 54% overpriced relative to average long run price/rent & price/income ratios. That's second highest after Canada. EU average is 14% only.
Belgium is a double whammy - hit by both private and public deficit and no built up buffers. Taxpayers will have to carry both debts way into the future.
Perhaps in EMs people save for future consumption, while in DMs people save to pay off past debt.
Liquidity trap becomes like the mousetrap - who can invent a better mousetrap (it's a marketing concept)
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christof Govaerts
On 11 Jan, 2012
@Theo
Not quite sure whether EMs in general are fiscally not benchmarked against GDP growth. DMs will surely have to save to pay off debt but a high savings quote may apply on China, for a lot of EMs this does no rule of thumb either. Coincidentally, I found the following link concerning real estate under/overvaluation coming from the Economist (nov 2011)
http://www.economist.com/node/21540231-
Theo
On 12 Jan, 2012
@ Christof
You are right, I have oversimplified it. But I don't think I'm too far of the mark.
My point was exploring relation between savings and public debt as opposed to the traditional notion of always linking savings to private investment and consumption.
In the case of Belgium (high public & private debt), the high savings rate (relative to other developed economies) could explain both - similar to Japan. It is a disaster when the banks (which hold both the savings and the mortgages) need to be nationalised - doesn't this put extra pressure on tax revenues?
On the property thing: there is a Deutsche Bank study from this month, also based on OECD numbers, which is slightly different and Canada is on top. I presume it includes Q4 2011 (one of the Economist goes till Q3 2011) but I don't know. Study done by torsten.slok@db.com If true, those are some moves in just 1 Q. Or are numbers currency adjusted... I doubt
Canada 75% 35% 55%
Belgium 63% 44% 54%-
christof Govaerts
On 12 Jan, 2012
@Theo
No problem about the stats and a I am still looking for an older economist link which includes Australia as well. And they are going for gold in terms of over-valuation, teh same as Canada !
On your question on banks and mortgages, I think I have some answers in my blog of today-
Theo
On 12 Jan, 2012
@Christof
The DB study puts Australia 4th after Norway.
Australia 57% 36% 47%
Australia has double Belgium population and is a very big place, but in reality there are only few places to live&work, thus property prices in those cities could be high.
Don't forget, both Canada & Australia are resource rich countries with university student/high skill immigrant policies.
On Australia property and private debt contact Prof. Steve Keen from UWS. He also has a blog Debtdeflation. He models Minsky's financial instability and Fisher's debt deflation.-
Christof
On 12 Jan, 2012
@theo
The only difficulty i have with australia is twofolded : thriving on commodity booms and carry trades pushing up the currency. And two and linked, that comes in handy because australian banks are vulnerable to the extent they rely on foreign funding for creating this wealth, funding necessary to finance the mortgage bubble. Looking at its real effective exchange rate evolution - taking into account inflation differentials with main trade partners - its currency is overvalued. A classic story of dutch disease whereby the commodity bonanza is destroying competitiveness in other sectors. Just have a look when risk on turns into risk off and what the cross exchange AUD against JPY does. Enlightening-
Theo
On 13 Jan, 2012
@ Christof
Totally agree with your analysis
But be a bit more open minded on the future dynamics of Australia and its banks within Asia-Pac. Those guys are now all over and the alumni network they have built through their universities is very impressive.
It's not for nothing they are paying the US Army protection money now within the region and for stationing troops (US cannot afford to bring back the boys when there are no jobs back home or they'll have another generation of Vietnam veterans with Nick Stone skills roaming the streets).
When you are that resource rich, there is a right time for any one of them in any economy.
They might be Down Under, but don't look down on the Aussies ;)
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christof Govaerts
On 13 Jan, 2012
@theo
I never look down on down under. But I don't know why, my heart goes more maori. But they suffer from the same desease. Unfortunately, as is the case for insance Barzil versus Mexico, they rae in the wrong shop of commidties : soft versus hard-
Theo
On 15 Jan, 2012
Personally I don't have preferences between soft & hard commodities. Not only are they codependent, but in both cases the single highest expense is the same.
For war you need silver and gold.
For prosper
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