Romanian Economic Environment – 2008 Global Financial Crisis

Business Economics
Unit leader: Dr. Hristos N
Paperwork: Claudiu Bejan

Romanian Economic Environment – 2008 Global Financial Crisis

SUBMISSION DATE: March 2014

ABSTRACT: European Community faced larger economic decline during 2008-2009
economic crisis consequently bringing unemployment and poverty in Central
and Eastern Europe countries (CEE). With the exception of Baltic countries
where the crisis enters beginning of 2007, the rest of Europe was touch by
the crisis in late 2008.
As part of European Community since January 2007, after an important
economic growth during the years up to 2008, Romania faced a difficult
period once the crisis started, big unemployment rate and negative
macroeconomics trends;
One of the most impacted industry sectors due to this crisis was
automotive sector which faced big output declines worldwide.
Since early 21st century, the economy of CEE countries was positively
affected by inflows capital from the West countries. Therefore,
private sector, mainly multinational companies, represents important
economic rate in CEE countries. Private sector faced during the crisis
volumes drops, headcount downsize, relocations, turnover instability…
The aims of this article are to document above facts and to understand
them. It will be explained how the crisis impacted Romanian economy and how
Romanian government reacts and faced the crisis. Also, we will understand
how the multinational companies in automotive industry fight against the
economic crisis, against downsize and how they protected their employees'
to minimize the unemployment rate in the area.
KEY WORDS: financial crisis, unemployment, GDP, inflation, output, demand,
government intervention.






Table of contents

1. Introduction – Global Financial Crisis (GFC)…………………………………...........3
1. US – the place where the crisis born…………………………………………...3
2. European Community – Crisis impact…………………………………………4
3. Romania – economic crisis environment………………………………………5
2. The
crisis…...................................................................
................................................6
1. Romania – How deep the crisis touched Romanian economy?……..………...6
2. Automotive industry and the crisis.……………………………………………9
3. How multinational companies faced the crisis? – Yazaki Romania
case…....10
3. The fight against the crisis…………………………………………………………….12
1. How Romanian Government react?…..…………………….………………...12
2. How Yazaki Romania management react?……………………...……………14
4. Conclusions……………………………………………………………………...……16
5. References………………………………………………………………………….....18
6. Appendix………………………………………………………………………………19
















INTRODUCTION – Global Financial Crisis (GFC)



1. US – the place where the crisis born
"The global financial crisis (GFC) was born in the United States of too
loose money and too lax regulation, aided and abetted by China's
willingness to provide credit to America seemingly without limit" (Geoffrey
Garrett, 2010). Before the crisis, America was happy to use big amount of
money to buy massive quantities of goods made in China, therefore US was
used to have big trade deficits with China due to lower interest rate. Many
times the economists speak about imbalanced China – US economy, "but
neither China nor the US wanted to stop the party while the music was still
playing – their economies benefitted too much from them, in short term at
least. Then the music stopped" as Geoffrey Garrett statement in Global
Policy (2010). Last decade, US imports from China increased about 300% (fig
1.), trade deficit was, of course, affected proportional negatively and
manufacturing job losses in same trend (fig2.).
In order to avoid such big financial crisis, China should export less and
consume more and vice versa, US should export more and consume less.
As Olivier Blanchard analyzed in his lecture "The crisis", 2009, the crisis
has 3 amplification mechanisms:
- Banking basis (see Appendix A Table Crisis Amplification);
- Uncertainty: bad loans, risk of insolvency,
reluctance of banks to lend to each other, investors taking their founds
out of the country, asset prices fall;
- Why happened: excess of optimism,
incentives and competence of rating agencies and, the most important is the
complex security as Mortgage-Backed Security (MBS) which were financial
products used by Wall Street banks that initially provided more funds for
homeownership.
2. European Community – crisis impact
The crisis starts in US and rapidly becomes the most severe recession in
decades worldwide. European Community was drastically affected. "One of the
risk is that the US is very connected to the rest of the world, most of
which is in severe recession. The global economy could be a significant
drag on US growth." (Martin Neil Baily and Douglas J. Elliott, 2009).
Therefore, it was easy to understand early 2008 that the crisis will enter
in Europe maybe even deeper than in US. "Emerging Europe suffered larger
output declines during 2008-09 than any other region in the world." (Erik
Berglof et al, 2009). Still in 2008 some countries resist against crisis
(see Appendix B. for Table 2008 Account Balance) but, very fast, output
growth early 2009 becomes negative double digit range in several countries
in Europe. Still some countries have single digit negative growth during
full year 2009.

In the early stage of the crisis, the economists believed that Europe will
be less affected than US, but, in fact, except France, most of important
European economies were strongly hit as we can see in fig. 3. Also the
recovery will be much slower than the crisis installed because the
companies should use fresh investment which, in a non-healthy economy, will
be difficult to find. "Banks and financial institution are recovering, as
witnessed by the normalization of interbank markets in terms of volumes and
spreads….Investment by firms is not to be expected to strongly recover in
the short-to-medium run either, since even if credit conditions will revert
to normal again, the crisis has left many firms with excess capacity, and
bankruptcies offer the possibility to acquire capital at low cost without
fresh investment." (Jean Paul Fitoussi and Francesco Saraceno, 2010).
3. Romania –economic crisis environment.
Romania is an ex-communist country, situated in Eastern Europe, the
neighbors being Ukraine and Moldavia in Nord-East, Hungary in West, Serbia
and Bulgaria in South-East (fig. 4). The population is about 19 million
inhabitants in 2011. Romanian speakers are about 86%, the rest are
Hungarians, Germans and other neighbor nations. Romania is parliamentary
republic, democratic rights and freedom being granted by constitution. The
country is well geographically positioned related transportation. Romania
is the connection between CIS countries and EU through European corridor
no. IV, they are the connection between North and South Europe through
corridor no. IX and also the connection through Danube River - corridor no.
VII.
As part of European Union (EU) since January 2007, after an important
economic growth the years before 2008, Romania faced a difficult period
once the crisis started. The unemployment was the most important economic
parameter which negatively impacts the economy. If in 2008, before the GFC
the unemployment was stable around 4.4%, after the crisis never back to the
same low level with 4.6% expectation in 2014 (fig. 5). Also, the gross
salary average has a negative impact in quality of life by decreasing
during the crisis about 8% with recovery back only in 3 years' time
(fig.6). Romanian government should hardly work to take strong actions to
keep the economy to a survival level in order to successfully face the 2008
crisis. Political stability is one of the most important variables to
sustain the difficulties which each CEE countries will meet. Last decade,
Western countries invested in CEE area in order to decrease their
production costs and to improve profits.


The crisis


4. Romania - How deep the crisis touched Romanian economy?
"Since 1990 rapid changes have taken place in Romania. As in other
transition economies, state-owned companies have been privatized and a
financial market created. Several economic reforms were also undertaken to
attract foreign investment, comply with the requirements of the
International Monetary Fund and prepare the accession to the European
Union." (Andrei Filip and Bernanrd Raffournier, 2010). Therefore, last day
of 2006 and first day of 2007, was a very noisy day in Bucharest due to
Romania joining European Union (EU).
As recognized by the economists, Romania had important economic growth last
decade, as we will see in the below study. The 2008 financial crisis could
be considered by Romanian government as unlucky due to stopping Romanian
economy growth and not easy to recover soon. The GDP growth 4% to 8% year
by year before 2008 crisis was just stopped and moved to a negative growth
of 6.5% as we can see in the fig. 7; three years later still not recovered.
The unemployment, after many years in continuously decreasing trend, start
to increase 3rd and 4th quarter of 2008 and since then, never reached the
same value as middle 2008 (fig. 8). "This recession has caused a lot of
jobs losses and more are to come. Past experience tells us that many of the
jobs lost in a recession do not ever return." (Martin Neil Baily and
Douglas J. Elliott, 2009). To be able to create new jobs, the government
needs a healthy economy first, new investment and new firms.
The private sector credit flow represent the net amount of liabilities in
which the sectors Non-Financial corporations, Households and Non-Profit
institution serving households have incurred along the year. Unfortunately,
after Lehman Brothers collapse, private sector was not so excited to invest
and for couple of years the investments were at insignificant value (fig.
9). During the years, Romanian economy was fighting to increase the
domestic goods exports and year by year new contracts and continuously
exports growth were supported also by becoming EU member. But, once the
crisis starts, the exports were not increasing and still suffering. As we
can see in fig.10, exports 2012 remain at the same level as 2008 and still
difficult to recover.
All this factors impacted negatively Romanian economy and directly impacted
the life quality. After some years with good improvements, decreasing from
about 4% to almost 2% in 2008, long time unemployment rate goes back to
more than 3%, the value from 2001 (fig. 11).
The people losing jobs will have difficulties in finding new once in short
time. For older employees', 55-64 age, the employment rate of their
category decreased from 42.5% to 40%, the level of 2005. All this facts
were having also negative impact in overall unemployment ratio. Labor
productivity (GDP per no. of employee), has negative figures during the
crisis (fig. 12).
The market demand drastically decreased. Construction segment, which used
to be one of the largest output increases last decade with 3.25% of GDP,
lost about 25% of demand, representing only 2.75% of GDP (fig. 13). The
banks become reticent to the loans, the rates increased and, of course, the
demand for residential constructions market decreased. "In every market
there must be a buyer and a seller. The seller is on the supply side of the
market; the buyer is on the demand side." (Schiller et al.2013).
Considering the above comments, we are in the position to have less and
less buyers in residential construction sector. Looking to the fig. 14
representing house inflation, we will understand that, during the crisis,
house inflation decreased to half in yearly bases in order to get back the
buyers. "A demand exists only if someone is willing and able to pay for the
good" (Schiller et al., 2013).
Due to high inflation rate during 2008-2009 crises and gross salary
diminished, we have a decrease in product quantity demand which affect
almost all industries. As we learned, the law of demand represent "as price
falls, the quantity demanded increases" as Schiller mention in "The Economy
Today" (2013), fig.15.
Of course, during the crises, the market should find equilibrium between
demand and supply in order to have the most efficient economy. For this, we
will need to clearly understand market demand and market supply. According
Schiller (2013), market demand represents "the total quantity of a good or
service people are willing and able to buy at alternative price..." and
market supply means "the total quantity of a good that seller are willing
and able to sell at alternative price…" Therefore, in order to have an
equilibrium market, we need to have equilibrium price (see Appendix C
Table: Equilibrium Price). During the crises we should not have market
shortage or market surplus which represent disequilibrium.
According above comments about some specific financial parameters, we
understand that Romania entered in declined economy mainly due to lower
demands and lower production outputs which means also less exports. In the
same time, lower private capital investment reached Romania and soon all
the industries were touched. Residential construction sector declined due
to lack of buyers which had no investments from banks. The banks became
less attractive due to interest rate increasing, the confidence decreased
and the risk increased naturally. This is the direct effect of financial
crisis described in fig. 16 by Olivier Blanchard, 2009 in "The Crisis".

5. Automotive industry and The Crisis
Automotive industry was one of the industries which "rings the bell" about
the crisis start. "The collapse of credit markets for major industrial
borrowers hit all auto companies and their suppliers, with the drop in
consumer borrowing leading to massive declines in sales" mentioned Herman
Rosenfeld in his article "The North American Auto Industry in Crisis",
(2009). The "Big Three" from Detroit, Ford, GM, Chrysler going very close
to bankruptcy. "Their problems are rooted in the particular strategic
choices they made in the pursuit of profits, in the uneven impact and
failures of the privatized U.S. welfare state, in the destructive dynamics
– to workers and their communities – of the intensified global competition
that now characterized capitalism, and in overcapacity in the auto
industry." (Herman Rosenfeld, 2009).
Obama administration rejected initially restructuring plan of "Big Three".
But, "the North American auto industry is not only just an industry, but
also a symbol of the nation. The industry holds the ultimate responsibility
to the American society", Yu Xia and Thomas Li-Ping Tang (2011). Obama and
his auto commission requested to the "Big Three" to align their production
methods and policy as "Big Three" Japanese car makers, Honda, Nisan, and
Toyota. To be able to be more productive and cost efficient, they were
obliged to cut the overcapacity they have, meaning to cut jobs, to close
plants. "According to CSM Worldwide, an automotive market consultancy firm,
the world could produce about 94 million cars a year – about 34 million
more than it is buying", The Economist, 2009. Therefore, as we cited in
previous chapter "US is very connected to the rest of the world" meaning
that, soon after Big Three collapse, entire world felt the automotive
crisis. Automotive industry in Europe was declined by 12% during the crisis
and still in 2012 not reached the volumes from 2007 before the recession
(fig.17).


6. How multinational companies faced the crisis? – Yazaki Romania
case
Multinational companies' represents one of the important sectors which
contribute to the GDP's of the countries. Due to their worldwide network,
some companies felt the crisis harder than others. According previous
chapter analyze, automotive multinational companies suffered too much
during the GFC.
We will study in this chapter the case of Japanese multinational company,
Yazaki, which is an independent automotive component manufacturer founded
in 1941. As automotive wire harnesses, their core product for which they
command a top share in the global market, they develop also manufacture
meters, electronic components and a host of other products for automotive
use.
The Yazaki Group comprises of 215 companies in 43 countries and employs
approximately 220,000 employees. (http://www.yazaki-
group.com/global/network/).
In 2003, due to favorable conditions on the labor market, Yazaki decided to
establish first manufacturing unit in Romania – YRL (Yazaki Romani
Limited), specialized in wire harnesses production for two strategic
customers: Toyota and Ford.
Yazaki Romania grows quickly, being able to reach an EBIT of 15% from sales
in 2007 before the crisis. As we can see in fig.18, after the crisis the
EBIT % fall down to less than 8% from sales and with a forecast that shows
an EBIT % never back to 2007 financial results. Also the plant cost
increased (fig 19) during the crisis due to volumes drop but fixed cost
remains almost the same. The management of the company reacts to adjust man-
power capacity according new volumes (see Appendix D Table Yazaki Headcount
Evolution). About 500 employees were released in order to decrease the
financial impact of the company results. Equipment capacity remained the
same but the usage was less, depreciation of the equipment could not be
frozen due to some specific equipment that should be used in two working
shifts instead of three.
The management of the company should find solution to increase the volumes
to use fully the space and equipment capacity and to reduce the fixed cost
in order the company to be competitive on the market. In chapter 3.2 below,
we will understand what the management did to face the crisis and how the
results turn back to positive trend.




The fight against the crisis


7. How Romanian Government react?
"The potential micro and macro failures of the marketplace provide specific
justifications for government intervention." (Schiller et al., 2013). The
government intervention is needed any time when the market is close to
fail. The main reasons that the market could fail are:
A) public goods – a good which can be consumed not only by one person;
B) externalities (fig.20) – the difference between the social and
private cost of a market activity;
C) market power – the ability to alter the market price of a
good/service;
D) inequity – fail to reach optimal mix of output;
By looking to above main reasons for market failures we can understand the
main government economic roles:
A) proper allocation of resources;
B) micro and macro stability;
C) distribution of income and wealth;
According to his role, the government should keep the unemployment at
acceptable level, take care about equity, smoothing booms and recessions,
keep inflation under control.
Once the crisis start, Romanian government was mainly looking to three main
areas to support the crisis fight:
A) Taxation;
B) Public sector;
C) Private sector investment.
Taxation
One of the important actions that Romanian government did was to increase
the VAT from 19% to 24%. Romania becomes one of the countries with biggest
VAT in EU. They were able to bring more money in the budget in order to
sustain less productive sectors, "the tax-and-transfer system is the
principal mechanism for redistributing income" as we learnt from Schiller,
(2013). Also personal income tax and corporate income tax is 16%; for
nightclubs or gambling operations cannot be lower than 5% from the total
revenue obtain from such activities; micro-companies can apply for a fiscal
regime with a tax of 3% from their revenue, doesn't matter the expenses.
(Source: PFK, Doing Business in Romania). The minimum tax was introduced
starting May, 2009 by "Boc Government".
Public sector
The public sector, administration and staff was and still is too crowdie in
Romania. The government has two options to reduce the cost of this sector:
A) To reduce the staff's in public sector and to adjust according budget
needs;
B) To keep the staff's and reduce the wages according budget;
"Boc Government" decided that, instead of increasing the unemployment and
having no solution for new working place it will be more benefit for budget
to cut 25% of public sector wages and to keep all the staff. As we can see
in fig. 21, government gross debt was in good trend during the years before
crisis, but, after the crisis, in correlation with negative GDP grows, it
was never back to the good trend (see Appendix E Table Real GDP Grow Rate).
Private sector
Considering that private sector is the one of the biggest contributor to
the budget, Romanian government started different projects to reach private
companies to invest in Romania. Therefore, in 2008 the government created a
list of grant schemes and other incentives in order to support and
stimulate the investment in the country. (Government Decision no. 753/2008)
Also, in 2009, "Boc Government" signed the contract with Ford Motor Company
by selling old Daewoo plant in Craiova, creating almost 10.000 working
places in Ford plant and to affiliate suppliers. The government promised
infrastructure projects in order to attract the investors in Romania, but,
unfortunately, still the projects are too slow moving and the investors
loose the credibility of improving infrastructure in Romania.


8. How Yazaki Romania management react?
As we mention chapters above, Yazaki Romania was impacted by the crisis:
volumes decreased, plant cost increased, employees' released and
productivity decreased. In order to recover financial results, Yazaki
Romania management decides to work harder in below topics:
A) New projects awards;
B) Outsourced production;
C) Productivity improvement projects;
New projects awards
Looking to the automotive market, team management decided to apply for the
new Ford Craiova plant quotation in order to increase company volumes and
by default to improve financial factors. They started to prepare a clear
overview of all costs which usual the customers need to choose a supplier
(fig.22). Also, by planning a good process overview, efficient equipment,
they were able to commit for a good efficiency during the life time of the
new Ford project in Craiova (see Appendix F Table Direct Productivity).
Having good efficiency and new technology equipment, the company was able
to commit very good plant cost also (see Appendix G Table Plant cost). In
2010 Yazaki Corporation was awarded with Ford Craiova project due to very
good results of YRL, therefore, new volumes are coming for the next years
for Yazaki Romania.
Outsourced production
Even the company decided to release employees' to be in line with new
capacity required, the fixed cost remained almost the same. The management
decided to relocate production in cheaper area. Considering that Yazaki
just been awarded with new Ford project in Craiova they decided to
establish the second manufacturing unit in Romania, working for Ford
Craiova and also to relocate some production there in order to decrease the
cost. Considering Ford located in Craiova city, Yazaki decided that the
best location it will be Caracal city, 45 Km to Craiova, Ford manufacturing
plant. Below, we will explain how Yazaki Romania choosen Caracal city as
production relocation and new project ramp-up.
First, they looked to the unemployment rate in each area in Romania (fig.
23) in order to be sure that the area can sustain the manpower needs (see
Appendix H and I related Unemployment rate). According this study, south
side of Romania was chosen to relocate production being the second area as
unemployment rate in Romania. Also, the wages are less than other regions
being the second place from the bottom (fig. 23).
By using cheapest work force, moving more than to 30% of the production in
the new location, Yazaki Romania turned the plant cost from increasing
trend to decreasing trend as we can see in fig 24. In the same time, Yazaki
Romania outsourced some inefficient processes to a third party. As
strategy, since 2010, Yazaki Romania is working with an average 15%
outsourced manpower in order to be more flexible in case of volumes drop
and in order to decrease the fix cost (the outsourced employees' doesn't
have all the benefits as Yazaki employees').
Productivity improvement
As productivity improvement, the management realized that the indirect jobs
(which in principle are not bringing added value to the final goods)
represent too big share in plant manpower. Therefore, by outsourcing
indirect jobs (material packaging, building maintenance staff, material
transporters…), the direct/indirect ratio increased from 5 in 2010 to 5.9
in 2011 and 6.3 in 2012 (fig. 25). This cost improvements were bringing
productivity increase.
As results, Yazaki Romania management, focusing in cost reduction
(production relocation or outsourcing), focusing in new projects award
(volumes increase, investment in future business) and in productivity
improvement, was able to improve the plant cost, to support employment rate
in the area by hiring more people (as we can see in Appendix D. Table YRL
Headcount Evolution) and to assure automotive business survival for the
following years.

1. Conclusions

Based on all above study, we could understand that the Global Economy is
not mature enough to recover quickly such Lehman brothers collapse.
Also, the governments are not prepared to face this kind of quick expansion
of the crisis. The signs of the crisis (output, unemployment, inflation),
were seeing too late by the governments and the actions taken were
inefficient to stop the decline. The history we learned is showing that the
capitalism has periodically a systemic crisis. We can see "the great
depression of the 1930s", also the crisis of regulated capitalism of the
1970s. A systemic crisis means that we can go out faster from the crisis
only by major restructuring the system. In Europe, some countries react
faster in front of the crisis turning back to positive GDP in only 2-3
years. The Romanian government took the strongest action in public sector,
this sector being the non-profitable sector. By this systemic
countermeasure against the crisis, we could see that in 3 years, Romanian
economy was back to positive trend, but still not back to 2007 figures. By
VAT increase, Romanian government managed to bring more money to the budget
but, in the same time, affected some industries, mainly "luxury industry",
e.g. automotive industry; this action contributes to the global trend of
decreasing sales in automotive market.
Multinational companies were affected by different economics in different
countries. Being "multinational" could be an advantage due to flexibility
of production in different economic environments. By production relocation
in cheaper countries or areas, the multinational companies could be able to
recover faster the loses due to crisis. But, even they are producing
cheaper, the output should be according demand. As we learned, one of the
first sign of the crisis is the output/demand factor. The companies should
adjust their production capacity according with market demand.
Overproduction is not helping during unhealthy economy.
As main conclusions, we should learn to "read" the crisis signs and also we
should learn to react faster when the signs appear. The governments should
have a quick intervention when the output is much higher than the demand,
they should react when the imports are much higher than the exports in
order to protect their employment. The governments should keep the balance
of local products consumption versus imports and to keep acceptable
taxation for local products. Therefore, to avoid the crisis, the economy
should be well "in-out" balanced, and production versus consumption ratio
should be in very close relation. The governments intervention is mandatory
when market fall dawn. The governments should take care about market
monopoly, price equity, mix of output… By all this factors, the government
will be able to protect their countries against inflation and unemployment,
against future economic crisis.



























2. References

A. Garret, Geoffrey (2010). G2 in G20: China, the United States and the
World after the Global Financial Crisis. Global Policy Volume 1. Issue
1. January, 2010.
B. Blanchard, Olivier (2009). The Crisis. Lecture GWU. August, 2009.
C. Neil Baily, Martin and J. Elliott, Douglas (2009). The US Financial
and Economic Crisis: Where Does It Stand and Where Do We Go From Here?
Business and Public Policy. June, 2009, p2.
D. Berglof, Eric, Korniyenko, Yeveniya, Plekhanov, Alexander and
Zettelmeyer, Jeronim (2009). Understanding the crisis in emerging
Europe. European Bank for Reconstruction and Development, November,
2009, p1.
E. Fitoussi, Jean Paul and Saraceno, Francesco (2010). Europe: How Deep
Is a Crisis? Policy Responses and Structural Factors Behind Diverging
Performances. Journal of Globalization and Development, Vol. 1, Issue
1, 2010, article 17.
F. Filip, Andrei and Raffournier, Bernanrd (2010). The value relevance of
earnings in a transition economy: The case of Romania. The
International Journal of Accounting, 2010, p77-103.
G. Neil Baily, Martin and J. Elliott, Douglas (2009). The US Financial
and Economic Crisis: Where Does It Stand and Where Do We Go From Here?
Business and Public Policy. June, 2009, p2.
H. Schiller, Bradley R., Hill, Cynthia D. and Wall, Sherri L. (2013). The
Economy Today, Thirteenth edition, p49.
I. Schiller, Bradley R., Hill, Cynthia D. and Wall, Sherri L. (2013). The
Economy Today, Thirteenth edition, p54.
J. Rosenfeld, Herman (2009). The North American Auto Industry in Crisis.
Relay, April-June, 2009, p18-24.
K. Xia, Yu and Li-Ping Tang, Thomas (2011). Sustainability in supply
chain management: suggestions for the auto industry. Management
Decision, Vol. 49, No. 4, 2011, pp. 495-512.
L. Schiller, Bradley R., Hill, Cynthia D. and Wall, Sherri L. (2013). The
Economy Today, Thirteenth edition, p78.
3. APPENDIX
A. Crisis amplification – Banking basis, by Olivier Blanchard, "The
crisis", 2009,

B. 2008 Account Balance

Source: Blanchard, The Crisis, 2009

C. Equilibrium Price

Schiller, The Economy Today, 2013

D. YRL Headcount Evolution

Source: internal Yazaki Romania









E. Real GDP Grow Rate - Romania

Source: Eurostat, 2014

F. Direct Productivity



Source: internal Yazaki Romania


G. Plant cost


Source: internal Yazaki Romania




H. Unemployment rate


Source: Grafton (2013)


I. Unemployment map


Source: Grafton (2013)

-----------------------


Fig 1




Fig 2




3



Germany, France, UK, the engines of European economy, were facing big
output loses during 2009



Fig. 4




Fig. 6
Source:Eurostat,2010


Source: Eurostat, 2013

Fig. 5






Fig. 7 source: Eurostat, 2014




Fig. 8 source: Eurostat, 2014




Fig. 10

Source: International Monetary Fund (IMF)




Fig. 11

Source: Eurostat, 2014




Fig. 9 Source: International Monetary Fund (IMF)




Fig. 12

Source: Eurostat, 2014




Fig. 14

Source: Eurostat, 2014




Fig. 13

Source: Eurostat, 2014




Fig. 15





Fig. 16

Olivier Blanchard




Fig. 17

Data from ACEA Pocket Guide 2013





2008



Fig. 18



Forecast

2008



Fig. 19




Fig. 20, Schiller, The Economy Today, 2013




Fig. 21- Source Eurostat, 2014


Equipment Investment 5,495,591 ¬08


Fig. 18

Forecast

2008


Fig. 19


Fig. 20, Schiller, The Economy Today, 2013


Fig. 21- Source Eurostat, 2014
"Equipment "5,495,591"€ "
"Investment " " "
"Ramp up cost "1,470,150"€ "
"IT Investment "100,000 "€ "
"Floor Space "10,347 "m2 "
"Fix cost Prod "3.47 "€/m2/Mont"
"Space " "h "
"Maintenance cost"0.40 "€/Hr "
"SG&A fixed & "0.45 "€/Hr "
"others " " "
"Non operating "0% " "
"expenses " " "


Fig. 22




Fig. 23




Fig. 25


Production relocation



Fig. 24


2008 crisis

Production relocation, new projects award