Economics and Finance Institute

Germany
Economic Crisis 2008-09

Lecturer: LAMUNN Soliel Room: 41

Group Members
1.

YANG Maria

2.
3.

RITH Ravitou
YIM Muddhita

4.
5. 6.

YUN Sopheaktra

YA Chansopheakdey VANNY Vansithsathya

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Content
I. II.

Germany Economic Crisis in 2008-2009

1. 2. 3.

Root Cause Consequences Policies

III. Germany After Crisis IV. Conclusion V. Bibliography

I. Germany

Geography Language Religion Currency

Government
Economy Central Bank

II.Economic Crisis

1. Root Cause
Hype in the housing markets of the United States was the root of the crisis

,So how did it become global economic crisis?

1. Root Cause

Crisis in U.S
1. Subprime Loan
High risk

Low-income debtor
High interest rate Flexible interest rate
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1. Root Cause

2. Subprime Loan crisis:

Price of real estate Interest rate

1. Root Cause
3. Form subprime Crisis to Financial Crisis Sell of subprime loan

1. Root Cause
4. From Financial Crisis to Economic Crisis
Banks as well as insurance companies were affected. Credit Crunch

2.Consequences
Affected

economic activities in Germany:

trade and expenditure

International

Consumption

Unemployment SME Etc.

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2.Consequences
GDP

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2.Consequences
GDP Per Capita

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2.Consequences
Unemployment

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2.Consequences
Export

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2.Consequences
Import

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3.Policies
Policies

adopted by Berlin Authorities:

Package I Package II Fund Financial Market Stabilization

Stimulus Stimulus Special

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3.Policies
1. Stimulus Package I
o o o

Adopted on 5 Nov 2008 Worth 70bn euros Taken to ensure jobs and economic growth through:
o o o o

Boosting private and public investment Easing economic situation of citizens and businesses Reviving consumption Ensuring employment

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3.Policies
1. Stimulus Package I
o

The most important measures included:

o o o o o

Subsidies for short hour work Automotive support Credit to SME Tax relief, of about 25%, for fixed assets

Enhancement of regional infrastructure

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3.Policies
2. Stimulus Package II
o o o

Adopted on 13th Feb 2009 Worth 50bn euros Was intended primarily to:

Provide jobs Strengthen the middle class & Increase cohesion and progress in society

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3.Policies
2. Stimulus Package II
o

The most important measures included:

Loans to large enterprises Loans to SME

Purchase of new cars

Investment in infrastructure and education

The energetic building refurbishment and research programs Enhancement of traffic infrastructure Modernization of hospitalities and urban development Modernization of education 20

3.Policies
3. Special Fund Financial Market Stabilization
o

What is SoFFin?

An agency at the German Federal Bank supervised by the Federal Ministry of Finance

What are SoFFins tasks?

Guarantees Recapitalization Assumption of risk positions

How does SoFFin finance?

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III. After Crisis

German

economic development after crisis:

rate of real GDP of export consumption recovery Growth of import

Growth Growth

domestic

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III. After Crisis

GDP evolution compared to same quarter of previous year (in %)
6 4 2

0
-2 -4 -6 -8 2006 2007 2008 2009 2010

Source: Federal Statistical Office

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IV. Conclusion
o o o

It was U.S where the crisis started. But other countries including Germany were affected. To maintain sustainability and growth, Germany adopted:
o o o

Stimulus Package I Stimulus Package II Special Fund Financial Market Stabilization

As the result, the policies have brought Germany both

economic growth and development.

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V. Reference

Symposium on Governmental Assistance for Industries and 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. Roxana and CHIRA Robert , Post-crisis Situation of German 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. Roxana and CHIRA Robert, Bucharest Academy of Economic Studies, German SMEs Affected by the World Crisis, roxana.hodorogel@gov.ro
Asmussen Jorg, the state secretary of the Federal Ministry of Finance in Germany, The Washington Quarterly, 32:3 pp. 197_204, July 2009, Mastering Global Financial Crises: A German Perspective, www.twq.com/09july/docs/09jul_Asmussen.pdf Ahrens Steffen, Kiel Institute for the World Economy, No. 11October 2009, Fiscal Responses to the Financial Crisis, www.ifw kiel.de/wirtschaftspolitik/.../kiel.../kiel_policy_ brief_11.pdf

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Thanks For Your Kind

Attention!

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Questions?

?
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