Country Presentation (Germany & Norway)

Presented By: Ronak Jain 4111033033

GERMANY

Socio-Polito-Economic Indicators of Germany

Political Overview Germany is a Federal Republic. The Federal Government, based in Berlin, consists of the Federal Chancellor and the Cabinet of Federal Ministers. Federal elections are held every four years. In addition, there are 16 state governments and thousands of local government 'communes'. Each state has its own constitution and a state parliament. State elections are held every four or five years. Current Ruling Party: Christian Democratic Union (CDU)

 Economic Overview Germany is the largest economy in Europe and the fourth-largest economy in the world (GDP was more than a $3.2 trillion in 2012). Germany is ranked as the world's third-largest exporter: approximately $1.7 trillion with a trade surplus of $186 billion. Exports of goods and services made up about 52 per cent of GDP.

 Germany's exports of services are relatively underdeveloped and reform in the services sectors is relatively slow, but new sectors, like IT, biotechnology and renewable energy are growing markedly. Agriculture accounts for only one per cent of GDP.

Economic Indicators
GDP: 3570.56 billion US dollars. The GDP value of Germany represents 5.76 percent of the world economy.

 Population:81.73 Million in 2012 Inflation Rate: 1.55% in Feb 2013 Foreign Exchange Reserves: Decreased to 184947 EUR Million in January of 2013 from 188630 EUR Million in December of 2012. Current Account: Surplus of 11300 EUR Million in January of 2013. BOT: surplus of 13.70 EUR Billion in January of 2013. IIP: Decreased 1.30 percent in January of 2013

Federal Financial Supervisory Authority

The Federal Financial Supervisory Authority is the financial regulatory authority for Germany. It is an independent federal institution with headquarters in Bonn and Frankfurt and falls under the supervision of the Federal Ministry of Finance (Germany). It supervises about 2,700 banks, 800 financial services institutions and over 700 insurance undertakings.

 The main task of BaFin is the supervision of banks, insurance companies and the trading of securities and ensure the viability, integrity and stability of the German financial system.

Deutsche Bundesbank Generali Deutschland) German Development Bank ) Commerzbank, Deutsche)

Financial Architecture

Financial Institutions
German Development Bank and Deutsche Corporation for International Development Cooperation

Financial Crisis 2008

Germany experienced a sharp contraction of its economy beginning at the second half of 2008. With its large export-oriented manufacturing sector and the specialization in investment goods, Germany is very exposed to developments in global trade. As the financial crisis triggered the sharp decline of world trade, this very open economy was hit sharper than others. Germany had a negative income growth of 6.9 % between the third quarter of 2008 and the second quarter of 2009.

 It reached the German economy via two channels: The first being finance. Many of its banks were overexposed to toxic speculative papers originating mainly in the US and Ireland. Some of the big private banks, especially Commerzbank and Hypo Real Estate, and top public banks (the Landesbanken) had to be rescued by public guarantees of gargantuan proportions, totalling 400 billion.

 Second one is Trade. It suffered immensely through the collapse of international demand. The automobile industry, in particular, suffered because of the overlap of the financial crisis with the energy crisis. The capital goods industry lost sales because consumer industries postponed capital investments when faced with a drop in demand.

Germanys Quick Recovery

Germanys success in recovering from the crisis was due to reforms that were similar to the Erhard reforms made in the 1950s; however different reforms were needed in 2008. Factors that caused the financial crisis and different economic realities that existed in Europe in 2008 required that the German government create new policies that diverged from Erhards reforms.

 Germanys rapid recovery is accredited to changes in the economic environment and governmental reforms: German Exports Hamburgs Harbour Tax Policies and Labour Reforms

Foreign Ownership participation in Germany

Germany is an essential conduit to trade and investment. According to the United National Conference on Trade and Development, investors have made Germany one of the leading countries in foreign direct investment which accounted for EUR 509 billion in 2010. More than 55,000 foreign companies operate in Germany and employ approximately three million people across dozens of sectors. Chinese investors have made Germany its number one location for green-field investments since 2008 and American executives consistently rank Germany first in Europe as a business location.

The Foreign direct investment; net inflows (% of GDP) in Germany was last reported at 1.13 in 2011

INDIA-GERMANY BILATERAL RELATIONS

Germany is amongst Indias most important partners for trade, investment and technology. Germany is Indias largest trading partner in European Union and 6th largest trading partner globally. Germany is also Indias second largest technology partner. Currently India ranks at the 28th position amongst trading partners for Germany worldwide, accounting for 0.7% of total German trade and ranks 5th among Asian exporters to Germany.

 For the period April 2000 to September 2012, Germany has been the eighth largest investor with cumulative FDI inflows of USD 5.05 billion. Sectors such as services, chemicals, automobiles, trading and electric equipment were main sectors for German investment. Indian investment in Germany has also increased in recent years. The IT sector continues to be the best represented in terms of foreign direct investment. India has initiated 40 projects in Germany since 2003, 20 of which are in the software and IT sectors.

Deutsche Bundesbank
It is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks (ESCB). The Bundesbank was established in 1957 and its headquater is in Frankfrut.

DUTIES
It shall participate in the performance of the ESCB's tasks with the primary objective of maintaining price stability, and shall arrange for the execution of domestic and international payments. Based on the Bundesbank Act and the ECB Statute, the Bundesbank has four areas of activity, which it mostly handles jointly with the ECB: The Bundesbank as a note-issuing bank The Bundesbank as the banks' banker (clearing house and bank supervision) The Bundesbank as the state's banker The Bundesbank as the manager of currency reserves

NORWAY

Socio-Polito-Economic Parameters
The Kingdom of Norway occupies the western and northern portions of Europe, bordered by Sweden, Finland, and Russia. Political Overview Norway is a constitutional monarchy and parliamentary democracy with legislative powers vested in the Storting (parliament). The Storting is made up of 169 members directly elected for four-year terms by proportional representation.

 Current Ruling Government: Centre-Left coalition Norway is not a member of the EU, tried to establish the closest links possible with the EU through the European Economic Area (EEA) agreement.

 Economic Overview Norway has an open economy with a floating exchange rate. Norway's emergence as a major oil and gas producer in the mid-1970s transformed its economy. The petroleum sector contributes over half of Norway's total export revenue. Norway is the world's eleventh largest producer of oil and second largest exporter of natural gas. It has approximately half of the remaining reserves of oil and gas in Europe and globally, is the third-biggest oil exporter, behind Saudi Arabia and Russia.

 It supplies 15 per cent of Europe's gas needs and, within a few years, is expected to increase gas exports dramatically to account for 30 per cent of European gas imports.

Economic Indicators
GDP: 485.80 billion US dollars in 2011.

 Population: 5.0 million people in 2011 Inflation rate: 1 percent in February of 2013. Foreign Exchange Reserve: Increased to 298998 NOK Million in January of 2013 from 288589 NOK Million in December of 2012. Current Account: Surplus of 96000 Million NOK in the fourth quarter of 2012. BOT: Surplus of 33652 Million NOK in February of 2013. IIP: -7.5 in December 2012

Financial Architecture
Norges Bank monitors the entire financial system with particular emphasis on mitigating systemic risk.

Financial Institutions
Norwegian Cooperation Agency for Development

Effect of Financial Crisis on Norway

Norway has been impacted by the international financial crisis through various channels. The negative effects were very rapidly reflected in the dollar-based Norwegian interbank market. When the dollar market completely dried up in the wake of the Lehman Brothers' failure, it became difficult for Norwegian banks to obtain funding. The Norwegian stock market(Oslo Bors) is heavily affected, dropped as much as 54 per cent in 2008.

 In the bond market opposite trend has been seen for corporate bonds where risk premiums have risen substantially. . The negative trend in the real economy has brought a substantial rise in loan losses, albeit from a very low level. At the same time, credit risk premiums the banks need to pay on their borrowing have risen markedly.

Indo Norwegian Bilateral Relations

 Key commodities of Indias Exports: Main import items from India include articles of apparels, textile, yarn & fabrics, misc. manufactured articles, metals, non-metal mineral manufacture, fruit & vegetables, furniture & parts, travel goods, hand bags, coffee, tea & spices, footwear.

 Key commodities of Indias Imports: . Some of the major exports of Norway to India are: machinery, iron & steel, electronic machinery appliances, general industrial machinery, scientific control equipment, non-ferrous metals, telecom & equipment.

Investments
Cumulative FDI inflows (including equity, re-invested earnings & other capital - from April 2000 to March 2011) were US$ 194.81 billion. Top sectors in India that attracted FDI equity inflows (from April 2000 to March 2011) from NORWAY, are: Chemicals (Other Than Fertilizers) (45%) Electrical Equipments (13%) Electronics (7%) Drugs & Pharmaceuticals (7%) Consultancy Services (4%)

Norges Bank
Norges Bank / Noregs Bank is the central bank of Norway. Apart from having traditional central bank responsibilities such as financial stability and price stability, it manages The Government Pension Fund of Norway, a stabilization fund that may be the world's largest sovereign wealth fund. The limited transparency of some SWFs makes it difficult to make accurate assessments of their assets under management.

Thank You