2015年-CEPS欧洲政策研究中心_Where_is_the_European_household_sector_in_the_deleveraging_cycle_7页_321kb

European Household Sector in the Deleveraging Cycle Summary

Core Content

This document explores the state of the European household sector during the deleveraging cycle following the financial crisis. It emphasizes the heterogeneity of debt reduction across EU member states and the challenges associated with managing this process to support economic recovery.

Main Points

• Deleveraging Trends: The household sector in Europe is undergoing a deleveraging process, but it is not uniform across all countries. Some nations, particularly those most affected by the crisis, have seen significant reductions in household debt, while others have experienced slower progress.

• Credit Growth and Financial Crises: Historically, excessive credit growth has been a key factor in predicting financial crises. However, this trend was often ignored or addressed too late, leading to asset bubbles and subsequent economic downturns.

• Impact of Asset Price Declines: The pre-crisis period saw rising asset prices that allowed households to take on more debt without increasing leverage. Post-crisis, the decline in asset values, especially property prices, has increased the risk associated with high household leverage and constrained borrowing capacity.

• Differences Among EU Countries:

  • Eastern Europe: These countries experienced rapid credit growth before the crisis, allowing them to catch up with Western Europe.
  • Western Europe: Despite slower growth rates, retail credit expanded faster than the real economy.
  • Southern Europe: Countries like Spain, Italy, Portugal, and Greece have seen sluggish household deleveraging.

• Debt-to-Income and Debt-to-GDP Ratios:

  • Ireland's debt-to-income ratio dropped from 161% in 2007 to 122% in 2011.
  • Spain, Greece, and Italy show marginal or stable declines.
  • Italy's ratio remains around 60%.
  • The US has also seen a decline in its debt-to-income ratio, with significant policy support playing a key role.

• Challenges of Deleveraging:

  • Deleveraging is a slow process, and the full repair of household balance sheets is expected to take several years.
  • Policy support is essential to prevent abrupt debt retrenchment that could hinder recovery.
  • The Swedish model of managing over-indebtedness is seen as a success, but its applicability to other countries is questionable due to differing economic and financial contexts.

• Economic and Policy Implications:

  • The global scale of the financial crisis necessitates a more complex approach to deleveraging compared to past experiences.
  • EU policymakers face significant challenges in restructuring and supporting the financial system.
  • Continued liquidity and policy support are needed to ensure a smooth deleveraging process across all economic sectors.

Key Information

• Deleveraging Mechanisms: Occurs through defaults, debt retirement, and reduced credit availability.
• ECB Data: Shows a drastic reversal in retail credit growth in the euro area.
• IMF Forecast: Predicts a mild recession for the euro area in 2012 due to weak growth.
• Sustainable Debt Levels: There is no clear consensus on what level of debt is sustainable for individual countries.
• Policy Support: Crucial for managing the deleveraging process and preventing economic shocks.

Figures and Data Highlights

• Figure 1: Annual credit growth rates in the euro area show a sharp decline from pre-crisis levels.
• Figure 2: Declines in property prices have increased the risk of over-leveraged households.
• Figure 3: Credit growth outpaced income and GDP growth significantly in the run-up to the crisis.
• Figure 4: Debt-to-income ratios for selected countries (Greece, Spain, Ireland, Italy, US) show varying trends.
• Figure 5: Household debt relative to GDP demonstrates a heterogeneous trend across EU member states.

Conclusion

The European household sector is in the early stages of deleveraging, a process that is expected to continue over multiple years. The speed and effectiveness of this process depend heavily on policy support and the broader economic environment. While some countries have made progress in reducing debt, others are still struggling, highlighting the need for tailored and sustained strategies to manage the deleveraging cycle without impeding economic recovery.