Europa-How have major economies responded to the COVID-19 pa（英文）行业资料ndemic-Consequences for growth trajectories and debt sustainability-report 2022-0

STUDYHowhavemajoreconomiesrespondedDpandemic?ExternalExternalauthors:NatachaVALLAFrançoisMIGUETEconomicGovernanceSupportUnit(EGOV)Directorate-GeneralforInternalPoliciesPE699.531–May2022IPOL|EconomicGovernanceSupportUnit2PE699.531HowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.5313Howhavemajoreconomiesrespondedtopandemic?AbstractThispaperprovidesanoverviewofthepolicymeasuresappliedintheEUtoaddresstheCOVID-19crisisandtheirmacroeconomicconsequences.Itfocusesonthemacroeconomicimpactonlabourmarkets,externalbalances,financialmarketsandthecorporatesector.Thepaperalsoexaminestheimpactonlonger-termgrowthandproductivity.Impactsonpublicfinancesanddebtsustainabilityareanalysedindependently,withconsiderationsregardingprospectivegrowth,interestrateandinflationdevelopments.Asthepolicyfocustransitionsfromcrisismanagementtoalonger-termpolicyforsustainablegrowthandwell-being,thepaperprovidespolicyrecommendations.ItpresentstheimpactofthecrisisonthelinkbetweennationalandEU-levelpolicies,andtheuniverseoffeasibleoptionsforthearchitectureandgovernanceofEMU,aswellasthefutureofthefiscalframeworkgoingforward.ThisdocumentwasprovidedbytheEconomicGovernanceSupportUnitattherequestoftheECONCommittee.IPOL|EconomicGovernanceSupportUnit4PE699.531ThisdocumentwasrequestedbytheEuropeanParliament'sCommitteeonEconomicandMonetaryAffairs.AUTHORSNatachaVALLA,SciencesPo,DeanoftheSchoolofManagementandInnovation.FrançoisMIGUET,NewYorkUniversity,PhDcandidateinEconomics.ADMINISTRATORRESPONSIBLEAliceZOPPÈEDITORIALASSISTANTDonellaBOLDILINGUISTICVERSIONSOriginal:ENABOUTTHEEDITORTheEconomicGovernanceSupportUnitprovidesin-houseandexternalexpertisetosupportEPcommitteesandotherparliamentarybodiesinshapinglegislationandexercisingdemocraticscrutinyoverEUinternalpolicies.TocontactEconomicGovernanceSupportUnitortosubscribetoitsnewsletterpleasewriteto:EconomicGovernanceSupportUnitEuropeanParliamentB-1047BrusselsE-mail:egov@ep.europa.euManuscriptcompletedinMay2022©EuropeanUnion,2022Thisdocumentandothersupportinganalysesareavailableontheinternetat:http://www.europarl.europa.eu/supporting-analysesTheopinionsexpressedinthisdocumentarethesoleresponsibilityoftheauthorsanddonotnecessarilyrepresenttheofficialpositionoftheEuropeanParliament.Reproductionandtranslationfornon-commercialpurposesareauthorised,providedthesourceisacknowledgedandtheEuropeanParliamentisgivenpriornoticeandsentacopy.HowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.5315CONTENTSEXECUTIVESUMMARY101.INTRODUCTION132.AMAPOFTHERESPONSESTOTHECOVID-PANDEMICINTHEMAINECONOMIES152.1.Above-the-linefiscalsupport162.2.Below-the-linemeasuresandcontingentliabilities162.3.Monetarypolicyandothermeasures173.MACROECONOMICCONSEQUENCESOFTHERESPONSESTOTHECOVID-19CRISIS213.1.Impactoneconomic,realGDPgrowth213.1.1.Thesolidshort-termgrowthperformancecanbeattributedtostrongpolicymeasures 213.1.2. withtheunintendedconsequenceofreachingsupply-sideconstraints?253.2.Impactonlabourmarkets253.2.1.Short-termunemploymentdynamicsarehighlydependentonthetypeofinstrumentsusedtosupportlabourmarkets253.2.2.Labourdemandandsupplymighthavestructurallychangedoverthemediumrun3.3.Short-termimpactonexternalbalancesofmemberstates283.4.Impactonfinancialmarketsandthecorporatesector303.4.1.Financialmarketimbalancesandcorporatedebthaveinevitablyaccumulatedduringthepandemic…303.4.2. Butsafeguardmeasuresinfavourofnon-financialcorporationshavecushionedthecorporatesector 323.4.3. withapotentialriskof“zombification”?334.CONSEQUENCESFORDEBTSUSTAINABILITY364.1.Theexceptionalcircumstancesfordebtissuanceandmainrisksofdebtaccumulationtoday364.2.Debtsustainabilityanalysis384.2.1.Literatureandpolicydebateonpublicdebtsustainability384.2.2.Ourdebtprojectionshighlightthedifferentiatedroleof"T−g"andofpoliciesacrosscountries394.3.Expectedimpactofthe“COVID-debt”onDebt-to-GDPratios434.4.Inflationconcernsandtheirimplicationsfordebtsustainability434.4.1.Theroleofinflationindebtsustainabilitymanagementisambivalent444.4.2.InflationandshortagespersistinEuropeandtheUnitedStates455.BESTPRACTICESANDRECOMMENDATIONS50IPOL|EconomicGovernanceSupportUnit6PE699.5315.1.Fromcountercyclicalfiscalpoliciestostructuralpolicies505.1.1.Fine-tuningthephasingoutoffull-strengthfiscalandmonetarysupport505.1.2.Towardsfiscaltoolsforlong-termgrowth505.1.3.Transitioningfromrecovery-expendituretoinvestmentforthecommongoodandfuture515.1.4.Dismissingillusionalsolutionstohandlethestockofpublicdebt525.2.AttheEUlevel535.2.1.TurningEuropeandebtinstrumentsintopermanenttools535.2.2.BudgetrulesinEurope:reformisneeded535.2.3.Fromdebtratiostoexpenditurerules545.3.AttheMemberStatelevel:Towardsamultiannualgovernanceofpublicfinances55REFERENCES56APPENDIX59TechnicalappendixforFigure7:RealGDPunderdifferentscenariosincludingno-stimuluscounterfactuals59TechnicalappendixforFigure8:Simulationsofunemploymenttrajectoriespre-andpost-COVIDTechnicalappendixforFigure18:Debtsustainabilityprojectionsbycountries60Additionalfigures61Additionalboxes62HowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.5317LISTOFABBREVIATIONSAPPAssetPurchaseProgramBLSBureauofLabourStatisticsCDSCreditDefaultSwapsCPIConsumerPriceIndexECBEuropeanCentralBankEFBEuropeanFiscalBoardEIBEuropeanInvestmentBankGDPGrossDomesticProductGFCGlobalFinancialCrisis(2008)GOSGrossOperatingSurplusIFIIndependentFiscalInstitutionsILOInternationalLabourOrganizationIMFInternationalMonetaryFundINSEEInstitutNationaldelaStatistiqueetdesEtudesEconomiquesKfWKreditanstaltfürWiederaufbauNFCNon-FinancialCorporationsOECDOrganisationforEconomicCo-operationandDevelopmentONSOfficeforNationalStatisticsPEPPPandemicEmergencyPurchaseProgrammePPIProducerPriceIndexRRFRecoveryandResilienceFacilitySMESmallandMediumEnterprisesSURESupporttomitigateUnemploymentRisksinanEmergencyTSCGTreatyonStability,CoordinationandGovernanceVATValueAddedTaxIPOL|EconomicGovernanceSupportUnit8PE699.531LISTOFBOXESBox1:Liquidityandsolvencyriskscounterfactualsasseenfromtheliterature32Box2:Model-baseddecompositionsofinflationintheUSandinEurope.49Box3:EUDebtinperspective53LISTOFFIGURESFigure1:COVID-19casesbycountry13Figure2:Sizeoffiscalpackagesbycountry15Figure3:ECBpolicyrates17Figure4:SizeoftheECBbalancesheet17Figure5:GDPgrowthbycomponent,percentagechangecomparedto2019Q422Figure6:Sectoraldecompositionof2020GDPgrowth22Figure7:RealGDPunderdifferentscenariosincludingno-stimuluscounterfactuals24Figure8:Simulationsofunemploymenttrajectoriespre-andpost-COVID26Figure9:HistoricaltrajectoriesofWorkingHoursandLabourParticipation26Figure10:CurrentaccountandTradebalances(goodsandservices)as%ofGDP29Figure11:Comparativeevolutionofexportsandimportsofgoodsandservices30Figure12:TotalCredittothePrivateNon-FinancialSectorasashareofcountryGDP31Figure13:AverageEffectiveYieldonBelow-InvestmentgradeCorporateBonds31Figure14:ComparativeevolutionofgrossoperatingprofitsforNFC33Figure15:EvolutionoffirmturnoverinFranceandGermany35Figure16:Non-PerformingLoanratios35Figure17:Yieldsonsovereigndebtbycountry37Figure18:Debtsustainabilityprojectionsbycountries:driversof“r-g”41Figure19:Debtsustainabilityprojectionsbycountries:driversofDebt-to-GDPratio42Figure20:Projectionsofpublicdebtacrosscountries(asashareofnominalGDP)43Figure21:EvolutionofCPIandPPIacrossregions45Figure22:EvolutionofCPIandPPIacrosssomeEuroareacountries46Figure23:InflationexpectationsintheUSandintheEuroarea47FigureB3.1:Componentsofheadlineinflation49FigureB3.2:CyclicalandenergycomponentsofinflationintheUSandintheeuroarea49FigureA.1:EvolutionoftheshareofretiredpeopleintheUnitedStates61HowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.5319FigureA.2:Euroareacountries’travelexportsandimportsasashareofGDPin201861FigureA.3:Decompositionof2021CPI61LISTOFTABLESTable1:Above-the-linemeasuresbycountries19Table2:Below-the-linemeasuresandcontingentliabilitiesbycountries20IPOL|EconomicGovernanceSupportUnit10PE699.531EXECUTIVESUMMARYBackgroundAnunprecedentedamountofresourceshasbeenmobilisedworldwideasaresponsetotheCOVID-19crisis.Europewasnoexception,withanenormousfinancialandmonetaryresponseatboththenationalandEUlevels.Asrecoveryfromthepandemicseemstodayongoing,thispaperprovidesacross-countryanalysisofthemacroeconomicimpactofpolicymeasurestakentoaddresstheCOVID-19crisisinEurope.Itanalysestheirconsequencesontheeconomy,includinglabourmarkets,externalbalances,financialmarketsandthecorporatesector.Italsolooksattheimpactofthecrisisandrelatedpolicymeasuresonboththedynamicsofpublicfinancesandondebtsustainability.Finally,itspellsoutpolicyrecommendationsinthoseareas.Policyinterventionmaterializedasacoordinatedfiscalandmonetarypolicyexpansion.Onthefiscalpolicyside,interventioninEuropeturnedouttobemuchmoretargetedthanintheUnitedStates,wheremoneyspentbythegovernmenttooktheformofclassicfiscalstimuluspackagestosupportaggregatedemand.Incontrast,EUMemberStatespredominantlyoptedfordirectandindirectsupport.Direct—or“above-the-line”—supportoftenamountedto10-15%ofacountry’sGDP,targetingprimarilythehealthcaresector,householdsandcorporations.Wagesubsidiesandpart-timeworkschemes,oneofthenoveltiesintroducedbyCOVID-19fiscalpackages,werethelargestinitiativeskresponsibilityforpartifnotallofthewagebilloftheprivatesectorDespiteprovingtobeverycostly,thisnovelpolicyinstrumentwasalsoverypowerfulinweatheringEuropeanlabourmarketsfromtheimpactoftheCOVIDshock.Indirect—or“below-the-line”—supportweightedmoreonspending,oftenintherangeof15-30%ofacountry’sGDP.Theaimofthesemeasureswastobringliquidityinthecorporatesector,aswellastorestoreconfidencethroughequityinjections,assetpurchasesanddirectloans.Thesetoolsimpliedanassetswaponthestatebalancesheet(privatecompanyequityorliabilityagainstliquidity),andthereforeexposethegovernmentstopotentiallyverylargelossesinthecaseofassetdepreciationordefault.Third,contingentliabilitiessuchasloanguaranteeswerealsoemployedasanadditionalmeasure.Onthemonetaryside,interventionwasalsomassive:theECBengagedintoamassiveQEprogramviathe€1,850billionPandemicEmergencyPurchaseProgramme(PEPP).Thesizeofitsbalancesheetgrewby103%between2020and2022,injectingvastamountsofliquidityinthefinancialandcorporatesectors.KeyfindingsWeevaluatetheCOVID-19supportmeasuresonthemacroeconomy.TheprofileofrealGDPsince2021revealsthestrengthofthepost-COVID19recovery.Thefallinactivitywasthemostmarkedinprivateconsumptionandinternationaltrade,asopposedtoinvestmentandpublicconsumption.Weperformedcounterfactualanalysistostudytheeffectivenessoffiscalsupportineachcountry.Thequantitativeevaluationofthelossesofactivityrelativetopre-crisistrendsandoftheimpactofcrisismeasuresrevealthatcountrieswherecrisismitigationmeasureshadthebiggestGDPimpactaretheUnitedStates,theUKandItaly.Measurescontributedtoa“rescue”of10to15%ofGDPatthetroughacrossallcountries.Theyalsoanticipatedtheturningpointineconomicactivity,mostlyinGermany,Italy,theUKandtheUnitedStates.Theanalysisthendivesintothedynamicsoflabourmarkets.Oursimulationssuggestthatpart-timeschemesandwagesubsidiesintheEUhavebeenhighlyeffective,withunemploymentratesandlabourforceparticipationlevelsinlinewithpre-crisislevelsattheendof2021formosteconomieswherethesewereapplied.Labourmarketsreactednotonlythroughtheshocktofirms’demandforlabour,butalsoonthesupplysidethroughthetransformativeimpactoftheCOVIDcrisisonlabourHowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.53111forceparticipation.Generally,theEuropeanapproachoffavouringafallintheaveragehoursworkedperemployeeinsteadoflettingunemploymentratesadjusttotheshock(asintheUnitedStatesandCanada),turnedoutsuccessfulforlabourmarketoutcomes.Regardingthecorporatesector,wearguethatthelatentfragilityofindebtedfirmsremainsariskfactorfortheeconomicrecovery.Defaultratesremain—sofar—contained,andmarginshavebeenpreserved.Butimbalancesinthefinancialmarketsandcorporatedebthaveinevitablyaccumulatedduringthepandemic,andthis,togetherwithassetpricemisalignments,iscertainlythebiggestriskweighingonthecorporatesector.Theanalysisthenturnstotheconsequencesoffiscaldeficitsforpublicdebtsustainabilityanalysis.Tothisscope,weproposeamodernframeworkweighingthevarious-anduncertain-trajectoriesofthekeycomponentsofthecostofdebtservicingintheshorttomediumrun.Asoutstandingpublicdebtstocksareveryhigh,wedocumentthattheirfundingandsustainabilityissubjecttothreemajorrisks.First,ashort-ormedium-termriseininterestratesandspreadsbetweenEUmembercountries,partlyrelatedtoinflation.Second,thestabilityoftheeuroareathroughdivergingfiscaltrajectoriesacrossMemberStates.Third,thelackofroomformanoeuvretomeetthechallengesoftomorrow(thiscouldparticularlybecometangiblegivengeopoliticaltensionsthataroseinearly2022).Akeyfindingofourpaperrelatestothedifferentiatedroleofthe“r-g”-thedifferentialbetweentherealinterestrateandtherateofeconomicgrowth,whichistheprimaryconditionfordebtstability-acrossEuropeancountries,andacrosstheAtlantic.Regardinginflationdynamics,theimplicationsof“higherforlonger”inflationratesforthefinancingcostsofEUMemberStatesaretangible:eitherthroughdirecteffectsonsovereignmarketfinancingconditionsorthroughthepressuretheycouldimposeforthetimingofmonetarypolicynormalisation.Weanalysein-depththechallengesrelatedtorecentsurgesininflationglobally.Weconcludethatthetransitorycomponentrelatedtherecentriseinenergypricesseemsdominantintheeuroarea,andthatdemand-drivenmedium-terminflationexpectationsarestillverymoderatecomparedtotheUnitesStates.PolicyrecommendationsFirst,wearguethatthetransitionfromcountercyclicalfiscalpoliciestostructuralpoliciesshouldbegradualbutdecisive,withacontinuousphasingoutoffull-strengthmonetarysupportwhilefiscalsupportadaptstotheconsequencesofthewarinUkraine.Risksarisingfrominflation,financialimbalancesandpublicdebtaccumulationshouldberecognized.Second,themetamorphosisoffiscalsupporttosustainlong-termgrowthshouldbeconsistent.Labourmarketsupportshouldprogressivelyevolvefroma“protectionatallcosts”oflabourrelationships;retrainingandreskillingprogramsshouldbeemphasizedtoreducesupply-sidebottlenecksintheeconomyrelatedtolabourshortages.Forcorporatesupport,theallocationofstateaidshouldbebettertargeted;governmentsshouldtransitionfromusingdebtinstruments—viathebroademergencyloan-financingtocompanies—toequityorquasi-equityfinancingaspartoftheirrecoveryandstimuluspackages.Third,weemphasisetheneedfortoolstoensurethatpublicandprivateinvestmentsaremadeforthecommongoodandforlong-term,sustainableimprovementsinwell-being.Thisreliesonathree-prongedstrategy:thedevelopmentofimpactmeasurementmetricsforpublicexpenditure;theaccelerationoftheagendaonextra-financialinformation,reportingandaccounting;andthedevelopmentofinnovativeassetclassesthatwouldallowtoswap“debt-for-impact”.IPOL|EconomicGovernanceSupportUnit12PE699.531RegardingthedebateonEUfiscalrulespost-COVID,wesuggestshiftingawayfromcurrentmetricsandoptforanewgenerationofexpenditure-basedrules.AttheMemberStatelevel,amultiannualgovernanceofpublicfinancesshouldprevail,withthedevelopmentofindependentevaluationbodies,possiblyinthehandsofparliaments.HowhavemajoreconomiesrespondedtotheCOVID-19pandemic?PE699.53113DailycasesgaverageDailycasesgaverageDailydeaths(dottedAftertheinitialoutbreakofCOVID-19casesinChinainNovemberandDecember2019,awaveofinfectionssweptacrosstheglobe.WithinEurope,thefirstcaseswerediagnosedinnorthernItalyinlateJanuary2020andshortlythereafteracrossallEUcountries(Figure1).Thefirstwaveofpublicpolicyresponses-rangingfromtravelrestrictionstostrictquarantines-broughttheeconomytoanunprecedentedstandstill.WithintheEU,realGDPfellby6.1%in2020,ahigherdropthanduringtheglobalfinancialcrisis.F