Unit 12 Btec P1 – Task P1A

P1 Describe the role net income marketing has in a modern marketing context victimization selected organisations as examples Internet marketing has played an important role as a means of advertising. All types of businesses have benefited from internet marketing when it comes to cost, relationship building and sales. Instantly millions of people can have access to a troupe, its products or services, and this can be done at any cadence anywhere in the world. Usually communication is done via e-mail trim costs in telephone calls as well.And this benefits not only businesses which do not get hold of to spend large sums of money on traditional ways of advertising but excessively benefits consumers who do not need to make telephone calls to know more about a company and its products or services it is possible to find out everything with a few clicks. Internet marketing is too used to close completes which make the transition easier and cheaper for the business and the customer. Even a mobile phone contract deal can be done via internet nowadays.Internet marketing also helps targeting overseas clients as products or services easily reach customers anywhere in the world through internet marketing. Relationship building is also one of the reasons why businesses use internet marketing this can be done through e-mails received to update customers with latest products, services or news another way to build good relationship with customers is by offering them services that can be done online without the hassle of passage out to resolve an issue. One example is online banking where banks offer customers the facility of cancelling sharpen debits, make payments or transfers within minutes.

Digital Subscriber Line

C H A P T E R Chapter Goals Identify and deal diverse types of digital reader bank note (digital subscriber line) technologies. Discuss the benefits of using xDSL technologies. inform how ASDL works. Explain the elemental concepts of signaling and modulation. Discuss make upitional DSL technologies (SDSL, HDSL, HDSL-2, G. SHDSL, IDSL, and VDSL). digital proofreader tenor Introduction digital endorser melody (DSL) engineering science is a modem technology that uses live twisted- twosome teleph maven accounts to fare high-bandwidth information, such(prenominal) as multimedia and icon, to good subscribers.The term xDSL c everyplaces a number of connatural thus far competing forms of DSL technologies, including ADSL, SDSL, HDSL, HDSL-2, G. SHDL, IDSL, and VDSL. xDSL is drawing signifi groundworkt attention from implementers and military aid providers because it promises to deliver high-bandwidth info grade to dispersed locations with relatively menial changes to the existing telco infrastructure. xDSL function are dedicated, point-to-point, public cyberspace feeler all over twisted-pair strapper telegram on the local loop (last mile) in the midst of a network run providers (NSP) central authority and the customer tar concent enumerate, or on local loops created either intrabuilding or intracampus.Currently, approximately DSL deployments are ADSL, primarily delivered to residential customers. This chapter focus mainly on defining ADSL. a cruciate digital referee Line Asymmetric digital Subscriber Line (ADSL) technology is asymmetric. It al bases to a greater extent bandwidth downriverfrom an NSPs central office to the customer sitethan upriver from the subscriber to the central office. This asymmetry, combined with always-on access (which eliminates call(a) setup), makes ADSL archetype for meshing/intranet surfing, video-on-demand, and remote LAN access. Users of these applications typically download frequently m ore t each(prenominal)ing than they s last. earningsworking Technologies Handbook 1-58705-001-3 21-1 Chapter 21 Asymmetric digital Subscriber Line digital Subscriber Line ADSL transmits more than 6 Mbps to a subscriber and as untold as 640 kbps more in both directions (shown in Figure 21-1). Such rates expand existing access energy by a factor of 50 or more without impertinently cabling. ADSL rear finish literally transform the existing public teaching network from one trammel to offseting, text, and low-resolution graphics to a abilityful, ubiquitous agreement capable of bringing multimedia, including full-motion video, to every home this century.Figure 21-1 The Components of an ADSL Network accommodate a Telco and a CPE Core network Existing pig Server ADSL ADSL 1. 5 to 9 Mbps 16 to 640 kbps Internet ADSL connection ADSL depart play a crucial role over the next disco biscuit or more as shout out companies enter new markets for delivering information in video and multimedia formats. New broadband cabling will down decades to reach all prospective subscribers. Success of these new attends depends on reaching as many subscribers as possible during the first some years.By bringing movies, television, video catalogs, remote CD-ROMs, corporate LANs, and the Internet into homes and small businesses, ADSL will make these markets viable and profitable for phone companies and application suppliers alike. ADSL Capabilities An ADSL roach connects an ADSL modem on each end of a twisted-pair knell line, creating three information enchants a high-velocity downstream channel, a medium-speed duplex channel, and a radical telephone service channel. The shadowonic telephone service channel is expose off from the digital modem by filters, thus guaranteeing uninterrupted basic telephone service, even if ADSL fails.The high-velocity channel ranges from 1. 5 to 9 Mbps, and duplex rates range from 16 to 640 kbps. Each channel can be submultiplexed to f orm multiple lower-rate bring. ADSL modems provide data rates consistent with labor union American T1 1. 544 Mbps and European E1 2. 048 Mbps digital hierarchies (see Figure 21-2), and can be purchased with unlike speed ranges and capabilities. The minimum configuration provides 1. 5 or 2. 0 Mbps downstream and a 16-kbps duplex channel others provide rates of 6. 1 Mbps and 64 kbps for duplex.Products with downstream rates up to 8 Mbps and duplex rates up to 640 kbps are available straight off. ADSL modems accommodate Asynchronous Transfer Mode ( atmospheric state) transport with variable rates and compensation for ATM overhead, as well as IP protocols. Internetworking Technologies Handbook 21-2 1-58705-001-3 Chapter 21 Digital Subscriber Line Asymmetric Digital Subscriber Line Figure 21-2 This Chart Shows the Speeds for downstream postman and semidetached house Bearer Channels Downstream bearer carry n x 1. 536 Mbps 1. 536 Mbps 3. 072 Mbps 4. 608 Mbps 6. 144 Mbps 2. 048 Mbp s 4. 096 Mbps x 2. 048 Mbps Duplex bearer convey C channel Optional impart 16 Kbps 64 Kbps 160 Kbps 384 Kbps 544 Kbps 576 Kbps Downstream data rates depend on a number of factors, including the duration of the horseshit line, its wire gauge, the presence of bridged taps, and cross-coupled intermeddlence. Line attenuation increases with line length and frequency, and decreases as wire diameter increases. Ignoring bridged taps, ADSL performs as shown in display panel 21-1. Table 21-1 Claimed ADSL Physical-Media Performance Data Rate (Mbps) 1. 5 or 2 1. 5 or 2 6. 1 6. 1 Wire Gauge (AWG) 24 26 24 26Distance (feet) 18,000 15,000 12,000 9,000 Wire Size (mm) 0. 5 0. 4 0. 5 0. 4 Distance (km) 5. 5 4. 6 3. 7 2. 7 Although the measure varies from telco to telco, these capabilities can cover up to 95 part of a loop plant, depending on the desired data rate. Customers beyond these distances can be reached with fiber-based digital loop carrier (DLC) systems. As these DLC systems twist com mercially available, telephone companies can offer virtually ubiquitous access in a relatively brusque time. Many applications envisioned for ADSL want digital compressed video.As a real-time signal, digital video cannot use link- or network-level error control procedures commonly found in data communications systems. Therefore, ADSL modems incorporate fore error correction that dramatically reduces errors ca utilise by impulse noise. Error correction on a symbol-by-symbol foundation too reduces errors cause by continuous noise coupled into a line. ADSL applied science ADSL depends on advanced digital signal processing and creative algorithms to shove so much information through twisted-pair telephone lines. In addition, many advances withstand been essential in transformers, analog filters, and analog/digital (A/D) converters. pine telephone lines may attenuate signals at 1 MHz (the outer(prenominal) edge of the band utilize by ADSL) by as much as 90 dB, forcing analog i nstalments of ADSL modems to work very hard to bring in large dynamic ranges, separate channels, and Internetworking Technologies Handbook 1-58705-001-3 21-3 Chapter 21 Asymmetric Digital Subscriber Line Digital Subscriber Line maintain low noise figures. On the outside, ADSL looks simpletransparent synchronous data pipes at various data rates over ordinary telephone lines. The inside, where all the transistors work, is a miracle of modern technology. Figure 21-3 displays the ADSL transceiver-network end.Figure 21-3 This Diagram Provides an Overview of the Devices That Make Up the ADSL Transceiver-Network End of the Topology Downstream channel(s) Duplex channel(s) Mux Error control XMTR D/A and A/D Line coupler Channel interval (FDM or ECH) Basic telephone service splitter Line Demux Duplex channel(s) Error control RCVR Basic telephone service ADSL transceivernetwork end (Premises end is mirror image) To create multiple channels, ADSL modems divide the available bandwidth of a tel ephone line in one of two ways frequency-division multiplexing (FDM) or echo cancellation, as shown in Figure 21-4.FDM assigns one band for upriver data and another band for downstream data. The downstream path is consequently divided by time-division multiplexing into one or more high-speed channels and one or more low-speed channels. The upriver path is as well as multiplexed into agree low-speed channels. let loose cancellation assigns the upstream band to overlap the downstream, and separates the two by substance of local echo cancellation, a proficiency well cognise in V. 32 and V. 34 modems. With either technique, ADSL splits off a 4-kHz region for basic telephone service at the DC end of the band.Internetworking Technologies Handbook 21-4 1-58705-001-3 Chapter 21 Digital Subscriber Line Signaling and intonation Figure 21-4 ADSL Uses FDM and Echo Cancellation to Divide the Available Bandwidth for Services FDM Upstream Basic telephone service Downstream Frequency Echo cancellation Upstream Basic telephone service Downstream 1 Mhz Frequency 1 Mhz An ADSL modem organizes the inwardness data stream created by multiplexing downstream channels, duplex channels, and maintenance channels together into blocks, and it attaches an error correction code to each block.The receiver therefore corrects errors that occur during transmission, up to the limits implied by the code and the block length. At the substance abusers woof, the unit also can create superblocks by interleaving data at bottom subblocks this allows the receiver to correct any combination of errors within a specific span of bits. This, in turn, allows for effective transmission of both data and video signals. Signaling and Modulation This section includes the following CAP and DMT play ADSL ADSL Standards and Associations CAP and DMT Modulated ADSLDMT and CAP are line-coding methods for modulating the electrical signals sent over the copper wire in the local loop. Carrierless Amplitude and Phase (CAP) is a common line-coding method. CAP is a well-understood technology because of its likeity with QAM. Although CAP is well-understood and relatively inexpensive, some argue that it is difficult to scale because it is a one-carrier modulation technique and is susceptible to narrowband interference. DMT uses multiple carriers. At this point, DMT is capable of more speed than CAP. This is one reason that the ANSI committee T1E1. accorded it standards status in document T1. 413. This standard calls for 256 subbands of 4 KHz each, thereby occupying 1. 024 GHz. Each subband can be modulated with QAM 64 for clean subbands, down to QPSK. If each of the subbands can persist QAM-64 modulation, then the forward channel supports 6. 1 Mbps. On the return path are 32 subbands, with a potential for 1. 5 Mbps. Internetworking Technologies Handbook 1-58705-001-3 21-5 Chapter 21 Signaling and Modulation Digital Subscriber Line CAP and DMT Compared CAP is a hotshot-carrier techniqu e that uses a wide passband.DMT is a multiple-carrier technique that uses many narrowband channels. The two take over a number of engineering differences, even though, ultimately, they can offer similar service to the network layers discussed previously. adaptational Equalization adaptive equalizers are amplifiers that circumstance frequency response to compensate for attenuation and phase error. Adaptive razing requires that the modems learn line characteristics and do so by sending probes and face at the return signals. The equalizer then knows how it must amplify signals to get a nice, flat frequency response.The greater the dynamic range, the more multiform the equalization. ADSL requires 50 dB of dynamic range, complicating adaptive equalization. Only with recent advances in digital signal processing (number crunching) has it become possible to puddle such equalization in relatively small packaging. Adaptive equalization is required for CAP because noise characteristics go significantly across the frequency passband. Adaptive equalization is not motifed for DMT because noise characteristics do not vary across any given 4-KHz subband.A major mercantile establishment in comparing DMT with CAP is determining the point at which the complexity of adaptive equalization surpasses the complexity of DMTs multiple Fourier transform calculations. This is determined by further implementation experience. Power Consumption Although DMT clearly scales and does not need adaptive equalization, other factors must be considered. First, with 256 channels, DMT has a disadvantage regarding power consumption (and, therefore, cost) when compared with CAP. DMT has a high peak-to-average power ratio because the multiple carriers can constructively interfere to yield a strong signal.DMT has higher computational exigencys, resulting in more transistors than the transceiver chips. Numbers are mostly proprietary at this point, but it is estimated that a single transceiver w ill consume 5 W of power, even with further advances. Power consumption is important because hundreds or thousands (as carriers dearly hope) of transceivers expertness be at the central office, or CEV. This would require much more heat dissipation than CAP requires. Latency Another issue for DMT is that latencies are somewhat higher than with CAP (15). Because each subband uses only 4 KHz, no bit can travel faster than permitted by a QAM-64.The trade-off between throughput and latency is a historical one in data communications and has normally been settled in the marketplace. Speed DMT appears to have the speed advantage over CAP. Because narrow carriers have relatively a few(prenominal) equalization problems, more self-asserting modulation techniques can be used on each channel. For CAP to come across comparable bit rates, it might be necessary to use more bandwidth, far beyond 1 MHz. This creates new problems associated with high frequencies on wires and would reduce CAPs la test advantage in power consumption. Internetworking Technologies Handbook 21-6 1-58705-001-3Chapter 21 Digital Subscriber Line Additional DSL Technologies ADSL Standards and Associations The American National Standards Institute (ANSI) working Group T1E1. 4 recently approved an ADSL standard at rates up to 6. 1 Mbps (DMT/ANSI Standard T1. 413). The European Technical Standards Institute (ETSI) contributed an sum up to T1. 413 to reflect European requirements. T1. 413 currently embodies a single terminal port at the expound end. Issue II expands the standard to include a multiplexed interface at the premise end, protocols for configuration and network management, and other improvements.The ATM fabrication and the Digital Audio-Visual Council (DAVIC) have both recognized ADSL as a physical layer transmission protocol for UTP media. Additional DSL Technologies This section discusses the following DSL technologies SDSL HDSL HDSL-2 G. SHDSL ISDN Digital Subscriber Line (DSL) V DSL SDSL Symmetric Digital Subscriber Line (SDSL) is a rate-adaptive version of HDSL and, like HDSL, is symmetric. It allows equal bandwidth downstream from an NSPs central office to the customer site as upstream from the subscriber to the central office. SDSL supports data only on a single line and does not support analog calls.SDSL uses 2B1Q line coding and can transmit up to 1. 54 Mbps to and from a subscriber, or can be configured to offer a variable range of bandwidth up to 1. 45 Mbps. The symmetry that SDSL offers, combined with always-on access (which eliminates call setup), makes it a favorable gruesome technology for small to medium businesses and branch offices, and can be an inexpensive utility(a) to dedicated leased lines and Frame Relay services. Because traffic is symmetrical, wedge transfer, web hosting, and distance-learning applications can effectively be implemented with SDSL. HDSLOriginally authentic by Bellcore, high bit-rate DSL (HDSL)/T1/E1 technologies ha ve been standardized by ANSI in the United States and by ETSI in Europe. The ANSI standard covers two-pair T1 transmission, with a data rate of 784 kbps on each twisted pair. ETSI standards exist both for a two-pair E1 system, with each pair carrying 1168 kbps, and a three-pair E1 system, with 784 kbps on each twisted pair. HDSL became popular because it is a better way of provisioning T1 or E1 over twisted-pair copper lines than the long-used technique known as Alternative Mark Inversion (AMI).HDSL uses less bandwidth and requires no repeaters up to the CSA range. By using adaptive line equalization and 2B1Q modulation, HDSL transmits 1. 544 Mbps or 2. 048 Mbps in bandwidth ranging from 80ntrast to the 1. 5 MHz required by AMI. (AMI is equable the encoding protocol used for the legal age of T1. ) Internetworking Technologies Handbook 1-58705-001-3 21-7 Chapter 21 Additional DSL Technologies Digital Subscriber Line T1 service can be installed in a day for less than $1,000 by insta lling HDSL modems at each end of the line.Installation via AMI costs much more and takes more time because of the requirement to add repeaters between the subscriber and the CO. Depending on the length of the line, the cost to add repeaters for AMI could be up to $5,000 and could take more than a week. HDSL is heavily used in cellular telephone buildouts. Traffic from the base station is backhauled to the CO using HDSL in more than 50 percent of installations. Currently, the vast majority of new T1 lines are provisioned with HDSL. However, because of the embedded base of AMI, less than 30 percent of existing T1 lines are provisioned with HDSL.HDSL does have drawbacks. First, no provision exists for analog vox because it uses the vowelise band. Second, ADSL achieves better speeds than HDSL because ADSLs asymmetry deliberately keeps the crosstalk at one end of the line. Symmetric systems such as HDSL have crosstalk at both ends. HDSL-2 HDSL-2 is an emerging standard and a promising alternative to HDSL. The intention is to offer a symmetric service at T1 speeds using a single-wire pair rather than two pairs. This will change it to go bad for a larger potential audience.It will require more aggressive modulation, shorter distances (about 10,000 feet), and better phone lines. Much of the SDSL equipment in the market today uses the 2B1Q line code developed for Integrated Services Digital Network. The Bell companies have insisted that using this SDSL at speeds higher than 768 kbps can cause interference with parting and other services that are offered on copper wire within the same wire bundle. The biggest advantage of HDSL-2, which was developed to serve as a standard by which different vendors equipment could interoperate, is that it is designed not to interfere with other services.However, HDSL-2 is full rate only, go services only at 1. 5 Mbps. G. SHDSL G. SHDSL is a standards-based, multirate version of HDSL-2 and offers symmetrical service. The advantage of HDSL-2, which was developed to serve as a standard by which different vendors equipment could interoperate, is that it is designed not to interfere with other services. However, the HDSL-2 standard addresses only services at 1. 5 Mbps. Multirate HDSL-2 is part of Issue 2 of the standard known as G. SHDSL, and is ratified by the ITU. G.SHDSL builds upon the benefits of HDSL-2 by offering symmetrical rates of 2. 3 Mbps. ISDN Digital Subscriber Line ISDN digital subscriber line (IDSL) is a cross between ISDN and xDSL. It is like ISDN in that it uses a single-wire pair to transmit full-duplex data at 128 kbps and at distances of up to RRD range. Like ISDN, IDSL uses a 2B1Q line code to enable transparent operation through the ISDN U interface. Finally, the user continues to use existing CPE (ISDN BRI terminal adapters, bridges, and routers) to make the CO connections.The big difference is from the carriers point-of-view. Unlike ISDN, ISDL does not connect through the voice switch. A new piece of data communications equipment terminates the ISDL connection and shuts it off to a router or data switch. This is a severalise feature because the overloading of central office voice switches by data users is a growing problem for telcos. Internetworking Technologies Handbook 21-8 1-58705-001-3 Chapter 21 Digital Subscriber Line Summary The limitation of ISDL is that the customer no long has access to ISDN signaling or voice services.But for Internet service providers, who do not provide a public voice service, ISDL is an interesting way of using POTS dial service to offer higher-speed Internet access, targeting the embedded base of more than five million ISDN users as an initial market. VDSL Very-High-Data-Rate Digital Subscriber Line (VDSL) transmits high-speed data over short reaches of twisted-pair copper telephone lines, with a range of speeds depending on actual line length. The maximum downstream rate under consideration is between 51 and 55 Mbps over lines up to 1000 feet (300 m) in length.Downstream speeds as low as 13 Mbps over lengths beyond 4000 feet (1500 m) are also common. Upstream rates in early models will be asymmetric, scarce like ADSL, at speeds from 1. 6 to 2. 3 Mbps. Both data channels will be separated in frequency from bands used for basic telephone service and Integrated Services Digital Network (ISDN), enable service providers to overlay VDSL on existing services. Currently, the two high-speed channels are also separated in frequency. As needs countermand for higher-speed upstream channels or symmetric rates, VDSL systems may need to use echo cancellation. SummaryASDL technology is asymmetric, allowing more bandwidth for downstream than upstream data flow. This asymmetric technology combined with always-on access makes ASDL ideal for users who typically download much more data than they send. An ASDL modem is connected to both ends of a twisted-pair telephone line to create three information channels a high-speed down stream channel, a medium-speed duplex channel, and a basic telephone service channel. ADSL modems create multiple channels by dividing the available bandwidth of a telephone line using either frequency-division multiplexing (FDM) or echo cancellation.Both techniques split off a 4-kHz region for basic telephone service at the DC end of the band Synchronous Digital Subscriber Line (SDSL) provides variable, symmetric, high-speed data communication up to 1. 54 Mbps. But SDSL doesnt allow analog on the same line, as ADSL does. SDSL uses 2B1Q line coding, a technology employed in ISDN and T1 services. SDSL is a viable business option because of its capability to transmit high-speed data over longer distances from the CO and because of its ease of deployment made possible by its spectral compatibility.High Bit-Rate DSL (HDSL) is a symmetric version of DSL that uses 2B1Q like SDSL, but over two-wire pairs. HDSL is targeted at business deployment because it offers full-rate symmetrical 1. 5 Mbps service. HDSL-2 is a standards-based version of HDSL offering symmetrical 1. 5 Mbps service like HDSL, but with a single twisted pair of wires. HDSL is full-rate and does not offer variable rates. G. SHDSL does offer multirate service with symmetrical speeds of up to 2. 3 Mbps. ISDN digital subscriber line (IDSL) is similar in many ways to ISDN. The primary difference is that IDSL is always on and can reach speeds up to 512 kbps with compression.IDSL uses 2B1Q line coding and does not support analog. On the other hand, IDSL does allow data communications over longer distances than other DSL options (up to 26,000 feet) and is considerably less expensive than ISDN service, in most cases. Because IDSL supports existing ISDN CPE, it makes it easy to convert from ISDN to IDSL. Internetworking Technologies Handbook 1-58705-001-3 21-9 Chapter 21 look backward Questions Digital Subscriber Line Very-High-Data-Rate Digital Subscriber Line (VDSL) transmits high-speed data over short dist ances through twisted-pair copper telephone lines.VDSL technology is still in the definition stage, but additional research is required beforehand it can be standardized. VSDL and ADSL are similar technologies. However, although VSDL transmits data at virtually 10 times the rate of ADSL, ADSL is the more complex transmission technology. Review Questions Q Name the current versions of DSL technology. A ADSL, SDSL, HDSL, HDSL-2, G. SHDL, IDSL, and VDSL. Q What are the two-line coding methods used for ADSL? A DMT and CAP. Q Which versions of DSL offer symmetrical service? A SDSL, HDSL, and HDSL-2.Q What symmetrical version of DSL offers multirate service over a single pair of wire? A G. SHDSL Q How far of a reach can IDSL achieve from the CO? A 26,000 feet. Q What downstream and upstream rates are proposed for VDSL? A The maximum downstream rate under consideration is between 51 and 55 Mbps over lines up to 1000 feet (300 m) in length. Downstream speeds as low as 13 Mbps over lengths beyond 4000 feet (1500 m) are also common. Upstream rates in early models will be asymmetric, nevertheless like ADSL, at speeds from 1. 6 to 2. 3 Mbps. For More Information ADSL Forum (http//www. adsl. com/) Cisco DSL Depot (http//www. isco. com/warp/public/779/servpro/promotions/dsldepot/) polish name G. SHDSL Asymmetrical Digital Subscriber Line. The upstream data rate is different from the downstream (typically the downstream is greater than the upstream). It is applicable to many DSL technologies offered today however, this term typically assumes DMT as defined in the ANSI T1. 413 specification. CPE Customer premises equipment, including cunnings such as CSU/DSUs, modems, and ISDN terminal adapters, required to provide an electromagnetic limit for wide-area network circuits before connecting to the router or access server.This equipment was historically provided by the telephone company, but it is now typically provided by the customer in unification Americ an markets. Internetworking Technologies Handbook 21-10 1-58705-001-3 Chapter 21 Digital Subscriber Line Glossary Terms CSU/DSU Channel service unit/data service unit. Provides electromagnetic termination of the digital (WAN) signal at the customer premises. Performs line learn and equalization functions, and responds to loopback commands sent from the central office.In North America, the customer supplies the device providing CSU/DSU functionality outside North America, the telecommunications service provider usually provides this device. DMT Discrete Multitone is the ANSI stipulate modulation technique for G. SHDSL (ANSI-T1. 413). DMT is theoretically capable of more speed than CAP. The key providers of DMT are Alcatel, Amati, Aware/ADI, and Orckit. Downstream Refers to the transmission of data from the central office (CO or COE) to the customer premise equipment (CPE). HDSL fast Digital Subscriber Line. This is a symmetrical modulation technique that uses two or three pai rs of wires.HDSL2 High-speed Digital Subscriber Line. This is a symmetrical modulation technique that can achieve speeds in the T1 (1. 5 Mbps) range using one copper pair. POTS Plain old telephone service. QAM Quadrature amplitude phase modulation. RG. SHDSL Rate Adaptive Digital Subscriber Line. This refers to the CAP2 and QAM technologies that use variable data rates to increase the utilization of various loop lengths. SDSL Symmetric Digital Subscriber Line. This indicates a subscriber line service that utilizes the same data rate for upstream and downstream. This term is applicable to MDSL and HDSL technologies.Upstream Refers to the transmission of data from the customer premises equipment (CPE) to the central office equipment (CO or COE). VDSL Very-High-Data-Rate Digital Subscriber Line. This is a high-speed asymmetrical service in the 10 to 25 Mbps range, typically limited to less than 5,000 feet. The targeted application for this technology is a hybrid fiber copper sy stem (fiber to the neighborhood). Internetworking Technologies Handbook 1-58705-001-3 21-11 Chapter 21 Glossary Terms Digital Subscriber Line Internetworking Technologies Handbook 21-12 1-58705-001-3

Role of Youth in Environment Protection

CHAPTER 20 WOMEN AND DEVELOPMENT I. II. III. IV. Introduction Progress, 1996-2000 Prospects, 2001-2005 Conclusion LIST OF TABLES plank 20-1 Table 20-2 Table 20-3 Table 20-4 lickout dissemination By sexual urge Within spheres, 1995 And 2000 Employment Distribution By Sector And sexual urge,1995 And 2000 Employment Distribution By demarcation And Gender, 1995 And 2000 R&D Personnel By Gender And Qualification, 1998 Chapter Chapter 20 Women and growth Malayansia project Ma laysia mean Malay sia curriculum Malaysia aim Malaysia Pl an Malaysia political plat anatomy Malaysia broadcast Ma laysia programme Malay sia pattern Malaysia curriculum Malaysia Pl 8 an Malaysia visualizeMalaysia end Ma laysia platform Malay 556 20 I. WOMEN AND DEVELOPMENT INTRODUCTION 20. 01 Women constitute an important pool of resource that quite a little be mobilized to achieve the subject area of study development agenda. through with(predicate) the continuous efforts of the administra tion in providing an enabling environment during the Seventh Plan period, women pass overd to go in in and contribute towards the societal and economic development of the country. 20. 02 During the Eighth Plan period, efforts exit endure to be undertaken to enhance the role, position and status of women to secure their date as constitute partners in home(a) development.Women entrust be domiciliated with the skills and knowledge to cope with the challenges of globalization and fulfil the needs of the knowledge-based economy. II. PROGRESS, 1996-2000 20. 03 During the Seventh Plan period, women have-to doe withd to make significant contributions in various fields of national development by means of greater participation in the economy. This was do mathematical through the get on operationalization of the content Policy for Women and its Plan of operateion for the progress of Women, which accommodated the implementation of sexual urge- comminuted and sense reading programmes.In addition, the removal of wakeless and institutional constraints that hold ined the participation of women in the development process barely facilitated the inter-group communication of women. Population, Labour Force and Employment 20. 04 Based on the 2000 Population Census, closely 48. 9 per penny or 11. 4 million of the add up commonwealth were women. The age-structure of the teenage-bearing(prenominal) Chapter 20 557 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan Ma population was kindred to that of the male, with 52. 4 per penny of the egg-producing(prenominal) population in the age-group 24 age and below.The Census in like manner revealed that due to the modify pistillate career expectancy, the comparison of the female population in the 65 to 74 years age-group change magnitude from 3. 0 per centime in 1991 to 4. 3 per cent in 2000. 20. 05 Although 48 per cent of women were in the work ing(a) age population of 15-64 years, they only accounted for a deuce-ace of the apprehend force. young-bearing(prenominal) project force participation registered an extend, from 43. 5 per cent in 1995 to 45. 8 per cent in 1997, but declined to 44 per cent in 1998 due to the economic downturn. With the economic recovery, this rate afterwards change magnitude to 44. per cent in 2000. 20. 06 Female employment in the mine and quarrying sphere of influence experienced the largest decline of 4. 9 per cent, between 1995 and 2000, followed by the agriculture, forestry, belongstock and fishing domain, which record a decline of 1. 8 per cent during the same period, as shown in Table 20-1. Various efforts were undertaken to helper these women to go into the job market, including the implementation of training programmes to encourage them to venture into small businesses as sanitary as retraining, and the identification and placement of these women in alternative jobs. 0. 07 Over all, the manufacturing sector absorbed the largest share of use women accounting for 27. 3 per cent in 2000, consistent with the expanding opportunities in the sector. Another sector that recorded high female employment is the wholesale and retail trade, hotel and restaurants, as shown in Table 20-2. 20. 08 Improvements were recorded in the occupational structure, with to a greater extent women moving into higher-paying occupations during the Plan period. The proportion of women in the professional and adept category add-on from 12. 7 per cent in 1995 to 13. per cent in 2000, while the proportion of women in the administrative and managerial category recorded an increase of 0. 4 per cent during the same period, as shown in Table 20-3. The share of women employed as agriculture workers declined from 16. 6 per cent in 1995 to 14. 8 per cent in 2000, consistent with the boilersuit decline in make out employment in the sector. Women were mainly employed as mathematical production an d related workers, which accounted for 22. 6 per cent of total female employment in 2000. 558 TABLE 20-1 EMPLOYMENT DISTRIBUTION BY sexual urge WITHIN SECTORS, 1995 AND 2000 (%) 1995 2000Sector antheral Female phallic Female Agriculture, Forestry, Livestock & fishing 71. 4 28. 6 73. 2 26. 8 Mining & quarry 82. 1 17. 9 87. 0 13. 0 Manufacturing 57. 2 42. 8 58. 9 41. 1 Construction 93. 5 6. 5 94. 0 6. 0 Electricity, Gas & water supply 90. 4 9. 6 90. 5 9. 5 Transport, Storage & Communications 87. 9 12. 1 86. 9 13. 1 wholesale & Retail Trade, Hotel & Restaurants 61. 3 38. 7 60. 7 39. 3 Finance, Insurance, Real farming & Business Services 60. 1 39. 9 60. 1 39. 9 Other Services 60. 0 40. 0 54. 7 45. 3 66. 1 33. 9 65. 5 34. 5 issue forth TABLE 20-2 EMPLOYMENT DISTRIBUTION BY SECTOR AND GENDER, 995 AND 2000 (%) 1995 2000 Sector Male Female Male Female 21. 6 16. 9 20. 2 14. 1 0. 5 0. 2 0. 4 0. 1 Manufacturing 20. 2 29. 4 20. 6 27. 3 Construction 11. 3 1. 5 12. 1 1. 5 0. 9 0. 2 0. 7 0 . 1 Agriculture, Forestry, Livestock & Fishing Mining & Quarrying Electricity, Gas & Water Transport, Storage & Communications 6. 2 Finance, Insurance, Real Estate & Business Services 1. 7 6. 1 1. 7 16. 6 Wholesale & Retail Trade, Hotel & Restaurants 20. 5 18. 1 22. 3 4. 5 5. 7 17. 2 27. 1 100. 0 100. 0 100. 0 Chapter 20 559 5. 6 24. 0 100. 0 wide 4. 3 18. 4 Other ServicesMalaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan Ma TABLE 20-3 EMPLOYMENT DISTRIBUTION BY OCCUPATION AND GENDER, 1995 AND 2000 (%) 1995 2000 Occupation Category Male Female Male Female Professional, Technical & tie in Workers 8. 4 12. 7 8. 9 13. 5 Administrative & Managerial Workers 3. 9 1. 8 4. 7 2. 2 Clerical & Related Workers 7. 5 17. 5 7. 1 17. 5 10. 5 11. 6 11. 1 12. 1 9. 4 14. 4 9. 5 17. 4 Agriculture Workers 21. 9 16. 6 20. 4 14. 8 Production & Related Workers 38. 3 25. 4 38. 4 22. 6 100. 0 100. 0 100. 0 100. Sales & Related Workers Service Workers Tota l 20. 09 Various measures were undertaken to improve female participation in the savvy market. The Employment Act 1955 was amended in 1998, which among others, provided for flexible working hours and empowered the look of Human Resources to make rules on statutory benefits to be paid to underemployed workers proportionate to that of full-time employees. This amendment permitted women, e surplusly housewives, to be gainfully employed in part-time employment, while allowing them the flexibility to meet their family obligations.In an effort to allow women in the universal sector to care for their newborn and to encourage breastfeeding, as of whitethorn 1998, maternity leave up to 60 days was allowed for a maximal of up to five pip-squeakren. In addition, nourishment for tax deductions were provided to employers for the establishment of child-care centres come up or at the workplace. Employers were also encouraged to provide facilities such as proper lodging, transport and goo dnesscare for the benefit of rude migrants, the majority of whom were women. fosterageal Attainment 20. 0 An important factor that contributed towards the social and economic approach of women was the huge investments in educational facilities 560 accompanied by the provision of equal rile to educational opportunities. Female primary and secondary school enrolment in local familiar institutions reflected the sexual urge ratio in the country. At the primary and secondary levels, enrolment of female students was well-nigh half of the total enrolment, while at the upper secondary level, female students accounted for about 66 per cent of total enrolment in 2000.Intake of female students into public universities spread out significantly from 50 per cent in 1995 to 55 per cent in 2000. 20. 11 With regard to preference for courses, female dominance in the liberal arts streams encompassd to be prevalent accounting for 65 per cent of total enrolment in the arts and humanities cours es in 2000. Females also make further inroads into science and technical courses. Female enrolment in the sciences in institutions of higher learning accounted for 60 per cent, while in the technical field it was 30 per cent in 2000.Skills and Entrepreneur culture 20. 12 item skills and entrepreneur training programmes were apply to change women to improve themselves and take wages of the opportunities in the job market. In this regard, courses in areas such as business, organisational and financial management were implemented. Skills training programmes provided by the Centre for Instructor and go Skills Training were expanded, resulting in an increase of 19. 4 per cent in the female enrolment between 1995 and 2000. 20. 3 With improved literacy and the changing needs of the rural community, courses that contributed towards the involvement of women in income-generating activities were also undertaken. Towards this end, extension services in the form of the provision of equipme nt, initial cracking grants, advisory services and training in areas such as product processing, as well as leading and motivation courses were conducted. 20. 14 Measures were undertaken to facilitate the involvement of women in business through the provision of easy access to capital. The Women Entrepreneurs Fund was established in 1998 with an assignation of RM10 million.A total of 12 projects amounting to RM9. 5 million was approved under the Fund. Through the Small Entrepreneur Fund, a total of about 6,000 women entrepreneurs obtained loans amounting to RM65 million. Chapter 20 561 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan Ma 20. 15 Various women entrepreneur and industry associations were formed, broadly speaking to serve as a platform for women entrepreneurs to establish networks and exchange entropy and experiences as well as to conduct training programmes, seminars, and workshops on motivation, leadership and entrepreneur development.The Womens Institute of Management (WIM) offered skills training courses, particularly in the area of entrepreneurship as well as operated an on-line network called WIMNET that provided database attempt facilities to businesswomen around the world. In addition, the Institute of Womens publicity, the Federation of Women Entrepreneurs standstill and the Association for Bumiputera Women Entrepreneurs conducted courses and seminars in skills and entrepreneur development.A total of about 10,000 women benefited from these courses. interrogation and Development 20. 16 Women were actively involved in look into and development activities during the Plan period. consort to the 1998 National Survey of Research and Development, which covered research undertaken by governing body research institutions, institutions of higher learning and the closed-door sector, women accounted for about a third of the total number of researchers with masters and bachelor degree qualifications, as shown in Table 20-4.In terms of research fields in the public sector, females were preponderantly found in the aesculapian and wellness and information sectors. TABLE 20-4 R&D PERSONNEL BY GENDER AND QUALIFICATION, 1998 (%) Phd Masters Bachelor Non-Degree Male Female Male Female Male Female Male Female GRI1 29. 2 8. 0 38. 0 16. 4 14. 6 8. 5 11. 8 9. 2 2 39. 8 15. 0 15. 0 14. 0 9. 7 9. 0 14. 0 19. 6 7. 0 1. 0 13. 0 3. 6 43. 2 15. 0 36. 8 8. 6 76. 0 24. 0 66. 0 34. 0 67. 5 32. 5 62. 6 37. 4 IHL Private Sector Total Notes 1 Refers to politics Research Institutions 2Refers to Institutions of Higher Learning 562 wellness Status 20. 17 Women were equal recipients of the benefits of developments in the health sector. As such, the health status of women beard to register improvements during the Plan period. The average female tone expectancy continued to improve from 74 years in 1995 to 74. 7 years in 2000 compared with 69. 3 years and 69. 9 years, respectively, for males. The maternal mortality rate rate, which is an indicator of the health status of women, remained low at 0. 2 per 1,000 live births during the Plan period. 20. 8 With the introduction of the Family Health Programme in 1996, womens health was given(p) violence from two perspectives, namely, the health of the family comprising maternal and child health, immunization, family planning, early detection of cancers and nutrition, as well as diseases affecting women with particular attention to human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS). The maternal and child health programme, aimed at reducing maternal and infant mortality and morbidity, astir(p) prenatal and antepartum healthcare and providing health and utrition education continued to be implemented. In addition, increased accessibility to safe delivery services contributed towards the achievement of a tolerable maternal mortality rate. As a result, deliveries in the public sector health facil ities increased from 85. 1 per cent in 1985 to 95. 3 per cent in 1999. Concerted efforts were also undertaken to widen the coverage of antenatal health care services resulting in 72 per cent of big(predicate) women having access to such services.The judicature introduced the Nutrition Rehabilitation Programme for Pregnant Mothers in 1997 to further improve the health status of women through the provision of decent nutrition, particularly women in the low-income group. 20. 19 With longer life expectancy and to jibe that women are healthy and remain healthy in their old age, health education programmes, seminars and workshops on healthy lifestyles, nutrition and the importance of regular medical examinations were introduced by the public and undercover sectors.In view of the fact that women, especially young women, are in the high-risk category in terms of photograph to AIDS, greater emphasis was given towards providing information on AIDS sensory faculty and education. Despite these efforts, the percentage of women with HIV infection increased from 4. 3 per cent in 1995 to 5. 1 per cent in 1999. A programme, particularisedally for pregnant mothers infected with HIV, was also introduced at all antenatal clinics. Chapter 20 563 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan MaPoverty among Female-headed Households 20. 20 Recognizing that change magnitude poverty among women is a world-wide phenomenon, various efforts were undertaken by the politics and nongovern amiable organizations (NGOs) to reduce the incidence of poverty among women. These included the provision of micro-credit facilities to about 22,850 women through Amanah Ikhtiar Malaysia to facilitate their involvement in small businesses and training programmes to back up single mothers to obtain employment. Despite these efforts, the incidence of poverty among female-headed households increased from 15. per cent or 585,688 households in 1997 to 16. 1 per cent or 588,554 households in 1999. confirmatory rule 20. 21 During the period, efforts to further enhance the status of women continued to be undertaken. Existing regulations were reviewed and new ones enacted to protect the rights and dignity of women in both public and private life. In recognition of the importance of womens contribution to the labour force, the amendment of the Employment Act 1955 encouraged more women to join the labour force.With the increased participation of women in the labour force, the existence of a healthy working environment is crucial. Towards this end, in 1999 the Government introduced a code of ethics for the saloon of sexual harassment at the workplace. This code, although applicable to both men and women, contains specialized provisions to protect women in the workplace. In addition, women taxpayers, whose husbands had no rateable income, were provided taxable relief similar to that available to a male taxpayer whose wife ha d no taxable income. 20. 2 To enhance the capability and capacity of syariah courts, including in the treatment of issues pertaining to Muslim women, the Government initiated a review of the organization of syariah courts in the country. Consequently, the department of Syariah Judiciary was established in 1997, among others, aimed at ensuring uniformity among states in the ruling of cases pertaining to Islamic Family Law. During the period, five states, namely, Melaka, Negeri Sembilan, Perlis, Pulau Pinang and Selangor as well as the Federal district of Kuala Lumpur implemented the Islamic Family Law.With this implementation, Muslim women were provided with better protection. 564 20. 23 Various efforts were undertaken to further protect the rights and dignity of women. The Women and Girls Protection Act 1973 and the Child Protection Act 1991 were reviewed and streamlined into the Child Act 2000. In addition, recognizing the role of women in fondness for their families, the Guard ianship of Infants Act 1961 was amended in 1999 to allow joint caution of children in matters relating to immigration and registration.In implementing this amendment, the Government, in 2000, also allowed mothers to sign all documents involving their small-scale children. National Machinery for the Advancement of Women 20. 24 The national machinery for the publicity of women in Malaysia comprises the Government, the private sector and NGOs, working in tandem towards the common objective of improving the status of women. Recognizing the need to further enhance the effectiveness of the national machinery, the Womens Affairs Department at the Ministry of National Unity and Social Development was transferred to the Prime Ministers Department in 1999.To enable more effective implementation of the National Policy for Women, the Plan of Action for the Advancement of Women was introduced to all public and private sector agencies to be used as a guide in the planning and implementation of development programmes. In addition, gender sensitizing training programmes continued to be implemented in the public sector and similar programmes were initiated in the private sector. 20. 5 During the period, the National Advisory Council on the Integration of Women in Development (NACIWID) continued to scat as the coordinating, consultative and advisory body on womens personal business by highlighting to the Government issues and concerns pertaining to women. Measures were also undertaken to institute links with the grassroot through the establishment of women service centres at the state level and womens affairs consultative committees at the state and district levels.During the Plan period, centres were established in the States of Kedah, Kelantan, Pahang, Sabah and Selangor, which provided various services such as counselling, legal assistance and fugitive shelter for women in need. The consultative committees monitored the implementation and impact of programmes and proj ects for women and provided the necessary feedback for improved project planning and implementation. 20. 26 NGOs played an important role in complementing the efforts of the Government in advancing the status of women.In addition to organizing courses in family health, legal literacy, entrepreneurial development and parenting skills, Chapter 20 565 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan Ma NGOs also implemented various activities to increase the knowledge and skills of women in the vocational and technical fields. Specific programmes were also introduced to assist single mothers in obtaining employment and caring for their families. NGOs also played the catalytic role in highlighting issues to further improve the status and rights of women.III. PROSPECTS, 2001-2005 20. 27 During the Eighth Plan period, efforts leave continue to be undertaken to further enhance the role, position and responsibilities of women so as to increase their participation and involvement in the social and economic life of the country. In implementing the Plan of Action for the Advancement of Women, the Government testament continue to go through that strategies and programmes implemented are consistent with Malaysian values, religious beliefs and cultural norms. 20. 8 Taking cognizance of the changes in the global environment and the need to lay to these changes, efforts entrust be undertaken to provide women with the skills and knowledge to cope with the twin responsibilities of family and career. Towards this end, the strategic thrusts for the future advancement of women give be t increasing female participation in the labour market t providing more education and training opportunities for women to meet the demands of the knowledge-based economy and improve their upwards mobility in the labour market t enhancing womens involvement in business reviewing laws and regulations that inhibit the advancement of women t i mproving further the health status of women t reducing the incidence of poverty among female-headed households t modify research activities to increase participation of women in development and enhance their well- beingness and t modify the national machinery and the institutional capacity for the advancement of women. 566 Increasing Female conjunction in the Labour Force 20. 29 Although women account for nearly half of the working age population, their participation in the labour force is relatively low.Various efforts volition be undertaken to mobilize this available pool of resource, thus increasing the supply of labour and contributing towards enhancing the nations output. The private sector, being the largest employer, go forth be further encouraged to introduce the necessary prevail facilities such as establishing child-care centres as well as providing transportation and housing facilities for their women employees. In addition, the Employment Act 1955 will be amended to include new and flexible working arrangements such as teleworking, part-time work and job sharing, to enable women to integrate career with household duties.Providing More learning and Training Opportunities 20. 30 Women will be provided with more education and training opportunities to meet the demands of the knowledge-based economy as well as to facilitate their upward mobility into higher-paying occupations. To encourage more women to pursue non-traditional fields of study such as science, engineering and vocational and technical education, career counselling programmes will be implemented to provide information and instill greater awareness among female students and parents regarding career opportunities in the professional and technical fields. 0. 31 With the need to increase knowledge and skills as well as move towards higher capital intensity, there will be a greater demand for extremely and multiskilled workers. Women will thus be provided with more training opportuniti es to acquire new and advanced skills relevant to the needs of the industry. In addition, in response to the rapid changes in engine room that requires constant upgrading of skills, women will be provided with increased opportunities for retraining.The private sector will also be encouraged to complement the efforts of the Government in providing more skills training opportunities for women, including in new technologies. 20. 32 Efforts will be undertaken to improve womens access to information and communications technology (ICT). Formal and non-formal training in areas such as computer literacy and applications of ICT will be conducted jointly by the Government and NGOs, with special emphasis given to rural women. In addition, to enhance the effectiveness of the training programmes, efforts will be taken to moderate that software development is gender sensitive.Chapter 20 567 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan M a Enhancing Womens Involvement in Business 20. 33 Efforts to enhance womens involvement in business will continue to be undertaken. Training in business-related areas such as marketing, accounting, budgeting and planning will be implemented by the Government and NGOs. Programmes will be implemented to enable women entrepreneurs to be more competitive in terms of production, product quality and design as well as packaging and labelling. In addition, the utilization of ICT in business will be emphasized.The Government will also continue to provide funds under the Women Entrepreneurs Fund to enable more women to participate in business. Through the implementation of gender sensitive strategies, more opportunities will be provided to women to increase their participation and involvement in business ventures. Reviewing Laws and Regulations 20. 34 Existing laws and regulations will be reviewed to eliminate provisions that discriminate or have adverse effects on women. Legislation that wil l be reviewed includes those pertaining to family law and the distribution of property for non-Muslims.The Government will study the feasibility of establishing family courts with a view towards ensuring that issues pertaining to the family are discussed and decisions made in a more conducive environment. Efforts will also be undertaken to ensure the effective enforcement and speedy implementation of court decisions, including decisions of syariah courts, so as to provide for the protection and public assistance of women. In addition, steps will continue to be taken to ensure the implementation of Islamic Family Law in the be states. Improving the Health Status 20. 5 Emphasis will continue to be given to promoting womens health and that of their families. Through the family health programme, special attention will be given to HIV and sexually-transmitted infection prevention, family planning, as well as the identification of factors causing non-communicable diseases such as cancer s, mental illnesses and cardiovascular diseases. In view of the fact that women have longer life expectancy and to ensure that women remain healthy in their old age, specific health education programmes including the promotion of healthy lifestyles and nutrition will continue to be implemented. 68 20. 36 Recognizing the peculiarities of illnesses confronting women, such as osteoporosis and those related to reproductive health, and in an effort to provide higher quality healthcare for women, the Government will establish a special hospital for women. This hospital will be the national referral centre for womens health and well-being. In addition, research on various aspects of womens health will be undertaken, with emphasis on biomedical, socio-behavioural and clinical research. Reducing the Incidence of Poverty among Female-headed Households 20. 7 In view of the increasing number of female-headed households and the rising incidence of poverty among them, efforts will be undertaken to ensure that these women have the capacity and capability to care for their families. Towards this end, research on the difficulties faced by women as head of households as well as the differing impacts of poverty on women and men will be undertaken to assist in the development of relevant programmes and projects. A special programme aimed at reducing the incidence of poverty among female-headed households will also be speculate to improve their quality of life as well as that of their families.Strengthening Research Activities 20. 38 During the Plan period, emphasis will be given to strengthening research in specific areas that will contribute towards increasing the participation of women in national development and enhancing their well-being. Research will be undertaken in areas such as the involvement of women in science and technology and ICT, the welfare of women in the informal sector, the role and status of women in the workplace, mobility of women in the labour force and remunerations received, women and mental health, and difficulties faced by women as head of households.Findings from these activities will assist in the formulation of policies and programmes that will further promote the advancement of women. Strengthening the National Machinery and the Institutional Capacity 20. 39 The establishment of the Ministry for Women and Family Development will provide greater focus on issues relating to women as well as ensure the effective implementation and coordination of programmes for women and families. Chapter 20 569 Malaysia Plan Ma laysia Plan Malay 8 sia Plan Malaysia Plan Malaysia Pl an Malaysia Plan Malaysia Plan MaConsistent with the goals of the National Policy for Women, efforts will be undertaken to improve and strengthen the national machinery for the advancement of women. Towards this end, measures will be instituted to ensure greater coordination and collaboration in the implementation of activities for women. In addition, links with th e grassroots will continue to be strengthened with the establishment of women service centres in the remaining 10 states. 20. 40 During the Plan period, various mechanisms will be instituted to enable women to participate in decision-making processes at all levels.This is to ensure the incorporation of the needs of women in the formulation of policies and the development of strategies and programmes for the further advancement of women. Gender analysis training and sensitization for policy-makers and planners and programme implementors will continue to be implemented in the public and private sectors. Greater efforts will also be undertaken to ensure the magisterial collection and compilation of gender disaggregated data to facilitate analysis, create awareness and formulate appropriate and effective follow-up action on gender issues. IV. CONCLUSION 0. 41 With the provision of equal access to healthcare as well as educational and training programmes and improved employment opportun ities, women made advancements in various fields of development. During the Eighth Plan period, efforts will continue to further enhance the status of women as equal partners in development. Towards this end, the Government will provide the enabling environment and supportive mechanisms, including the implementation of gender sensitive programmes, to enable women to reach their full potential in the social and economic fields of development. 570

Minorities in Australian Literature Essay

Australian writings consists of m any(prenominal) theatrical performances of the Australian debequest of life that are constructed by many national stereotypes. Various critics argue that the present-day(prenominal) literary offices of the average Australian do non embrace enough cultural mixture by dint of the incorporation of autochthonic mass, fe mannishs and pagan communities. The representations of Australian tidy sum have changed dramatically over a period of time.While the first Australian literary pieces consisted of only one specific brand of soulfulness, neglecting wo work force and aborigines, during the nations emergence and the arrival of more heathen people, there was a rise in the representations of these minority mathematical groups. Following this, in the late 20th century to current days, these minority groups have begun to express and represent themselves done writing.Despite the some honey oil representation of the Australian person non inc luding these minorities, there has been a significant change in their representations through literature and the version that does not include them, is predominately used through non-literary flora. The common representation of the Australian people is a tough Anglo-Saxon male who works in fatigue intensive jobs. This portrayal has been used heavily to identify Australians, particularly by the current media, to build on the Australian image.The concept of this type of person representing the whole nation was formed from traditional texts in the 19th century, when the writers were near entirely white European males and chose to write only of people worry themselves. When the ladies have it off to the snip shed and Clancy from the overflow, are examples of the types of literary pieces that were pen in the 19th century, which focus on the white men of Australia who work in tough jobs in the outback. When the ladies come to the shearing shed, written by enthalpy Lawson in 1897 is rough the reactions of Australian men when women are in their presence.The song composes the image of masculine men who work in a shearing shed, and represents their job as noble, as women come from the city to watch them. Women are equal as delicate objects of affection that hold little impressiveness to the story. The only time in which the women are described doing or saying something is when they comment on the appearance of the animals, and they gush and say in a girly way, that the dear little lambs are sweet. This being the only thing that women say, illustrates that they did not hold any real significance to the story, and their opinions were completely left out.The way in which the women are portrayed in the poesy is not necessarily negative, but they are not particularly valued characters, and are seen as the otherwise. This is collect to the attempt of a white male providing his personal opinion on the way another type of person acts, which creates a distorted representation. The men and women in this text have an obvious legal separation between them, and it is express that they are on very different levels, which is not an accurate portrayal of real life. Clancy of the overflow was written in 1889 by one of Australias most famous poets, Banjo Paterson.The story shares the same representation of the Australian male, who works with animals out in the bush. In the poem Paterson attempts to exist the quintessential Australian, and who believes every man should be which is a besotted worker who is in touch with life on the land. Through the eyes of an speckle worker the poem represents outback life as desired over city living and working, I am sitting in my mucky little office, where a stingy ray of sunlight struggles feebly exhaust between the houses tall. Clancy, and his outback life is represented as desired by the city dweller, And I somehow fancy that Id corresponding to change with Clancy, standardized to take a turn at drovi ng where the seasons come and go. The poem does not include aborigines, women or ethnic people, which by forthwiths standard is frowned upon but in the time of the poems creation was common in texts. These two, and many more texts from Banjo Paterson and Henry Lawson reinforce the argument that the embodiment of the Australian person was most commonly used in traditional Australian literature, and the opinions of the minority groups are excluded.Progressing from the prejudiced representation that they received from male writers, women have become just as equally common and palmy as men in Australian literature. In todays Australian society, women are in a better situation than indigenous and ethnic Australians in terms of equality, which makes their characterization in literary works more familiar. The liberation of women in Australian literature has given womanlys the probability to write most and express themselves through their personal opinions, creating countless female Australian authors.If I had a gun is a poem written by Gig Ryan, that represents her confronting attitudes toward the men that surround her. The poem consists of Gig Ryan explaining the men that she would flash because of their disrespectful attitude towards women. There is . She uses particular examples of the way men in society sexualize her and other women, Id shoot the man who whistled from his balcony. She even writes roughly the smallest occurrences that frustrate her, illustrating that she doesnt accept any form of gender superiority, Id shoot the man uttermost night who said smile honey. A woman writing about the men that she would figuratively murder, shows the growth that Australian literature has endured. Many eld prior, women were only rarely written about and their true feelings and scenes were silenced. Now, they have the chance to voice their opinions, even in a confronting manner and simmer down be embraced by the Australian public. Throughout the 20th centur y, women, aborigines and ethnic people began to be identified and represented more regularly, however still commonly through the perspective of Anglo-Saxon males.Despite this improvement, the others could not represent themselves, so soulfulness else represented them. This obviously led to a one-sided representation, because no involvement how sympathetic the author was, they were slewing things through their own perspective, which is particularly patent with the aboriginal representations in texts. The novel Coonardo written by Katherine Susannah Pritchard addresses the complex issues of will power and the colonial enterprise that was present in its publication date of 1958.It contains the favourable inter-racial relationship of Hugh, a non-indigenous landowner and Coonardo, an indigenous woman as the declaration to these difficult situations. This was an early time in Australia for a topic like this to become a successful novel, especially because the author held a non-bias ed perspective throughout the novel, which would have limited readers to those who did not have a strong opinion on these matters. David Maloufs retrieve Babylon (1993) deals with the problem of how to represent discrimination and reversing the representations of the other.The main character, Gemmy digestd in an aboriginal community for 16 years and an eventual rescue of him by white settlers creates a double sense that does not allow for him to fully re-embrace his white culture that soon becomes the other. Malouf, disdain his white heritage does achieve a very broad-minded representation of the aboriginal people. He appears to show sympathy towards the indigenous community, which allows him to secure the story through their eyes, casting the white people and the things they did as bad.The depute of check throughout the novel is mainly of the tribe that Gemmy belonged to, instead of himself. The novel, time containing a great racial tolerance and acceptance towards the in digenous people, does however, still support the notion of the unstable relationship between non-indigenous and indigenous Australians. Remembering Babylon provides a more in depth representation from the point of view of the aboriginal people, whereas Coonardo represents both races equally from an outsiders perspective.Many ethnic immigrants have been left with the smallest amount of representations in Australian literature, due to the dust coat Australia Policy lasting up until the mid 20th century, which has rendered their Australian legacy very young. This obviously has now left them struggling to be represented in key texts because of their short history. Ethnic groups who are represented in literary works that are pass judgment within the mainstream arent immensely common. However when these ethnic groups are personified, it creates a highly accurate representation of the average Australian communities.Carlos Tsiolkas is a Greek-Australian author, who wrote The smooch, a p opular, contemporary piece of Australian literature that was turned into a television series. This novel naturally integrates white, Greek, Indian and indigenous Australians into a friendship community, illustrating the genuine multicultural society of Australia. Tsiolkass heritage assists him in providing an accurate representation of what it is like for these ethnic characters to live in Australia, because he has the ability to write from experience and represent himself.The slap does not have an obvious focus on the inter-racial relationships that it contains, but due to the variety of ethnicity that is incorporated into the characters, it is clear to see that the author made a conscious decision to include a range of cultural diversity in his novel. Ethnic immigrants who become successful authors usually write about their experiences in Australia, that become popular within the Anglo-Australian community, as their pieces offer a different view point, that challenges the way Aust ralians view themselves.The ungrateful immigrant is a poem by Yu Ouyang that is an example of an ethnic author challenging the common detection of the Australian way of life. The poem is Ouyangs personal view on Australia and its people, challenging the common belief that Australians are friendly and welcome people, particularly to immigrants. He speaks about many elements of the country that he does not agree with or particularly like, and the negative way that the Australian people have responded to him. You think that because I came to and live in Australia, I should be grateful for the rest of my life. He even says that his decision to migrate to Australia was an permanent mistake. This poem, like if I had a gun speaks very negatively about certain groups of people and challenges many common ideologies that exist about the Australian way of life, however it is still recognized and appreciated as a passionate literary piece. It would be understandable for many Australians to g et pique and disregard this text due to the challenging opinions that it contains, but the piece has been accepted into the community because it is seen as an Australian person giving his opinion on his country.Also similar to if I had a gun, The ungrateful immigrant shows the progress in Australian literature and the different representations of the Australian way of life that it now contains. It is evident that these literary works provide evidence that supports the argument that, despite the common stereotype of Australian people still being an Anglo-Saxon male, Australian literature does provide an immense variety of representations of women, indigenous Australians, and ethnic communities.They also illustrate the progression of Australian literature, from when it contained an incredibly narrow group of representations, to now when it contains an abundance of different racial and gendered authors and characters that contribute to the production of literary pieces, and the repres entations of the Australians that they contain. It is important, when analyzing the national identity of Australian way of life to evaluate the cite of its literature, and the representations that it contains and upholds.

Good vs Evil †English Essay Essay

in that location is neither a definite good nor evil, but only the colorise area in-between. The Japanese proverb of Yin and Yang states that in all good in that respect is somewhat evil and in all evil there is bonce good thus without good there can be no evil and without evil there can be no good. lousiness was once described to me as The inability to feel sympathy and at first I agreed with this analogy but upon further concept and deliberation I decided that it was not entirely true, for if evil is the inability to feel sympathy then that ease ups all toys of sympathy good. However, that analogy would make an act, one that almost the entire world agrees is purely evil, an act of good.The act in question is the destruction of the twin towers of 9/11, because the perpetrators were sympathetic. They were sympathetic towards their ground and their people who, contrary to popular knowledge, had already been invaded and were being oppressed by the USA who were trying to secu re their oil reserves.There is no flair to moderate universally what is considered good and evil. Every man believes in some way that their induce actions are only and righteous whilst also believe that their enemys actions are acts of evil purely because they oppose his knowledge wishes thus making all man good in his own eyes even evil in the eyes of those he opposes. each(prenominal) and every one of us must decide for ourselves what is good and what is evil, and yet we must still conform to the norms of hostel. The definition of what is right and what is wrong may come from many different places. Some blindly accept what inn tells then to where others question society and still others actively oppose societys views. Some get their definition from the relative religious give-and-take and follow that without question whereas others merely see it as a everyday guideline whereupon to base their actions.I believe that the concepts of good and bad, righteousness and evil, ju st and unjust exist purely to justify mans actions and that they cook and will continue to change to fit the person whose action requires justifying. Alas, these headstrong opposing forces are bound to perpetually clash as they get through for a balance. For without either life as we know it could never exist, maybe life at all could not exist.

Quality Metal Service Center Essay

The disclose issue in the case is that the incentive compensation system does not motivate district managers to make decisions which are consistent with the strategy of timbre Metal Service Center (QMSC) because it is tied to the districts target ROA. Acquiring the new process equipment reduces the incentive bonus of the Columbus district Manager, Mr. Ken Richards, from 11.1% to 4.28% of his musical theme salary. This happens because the asset base increases with the new equipment and will turn over the target for 1992. This may motivate him to not proceed with the purchase even up if the proposal of the Sales Manager, Ms. Elizabeth Barret, maneuvers that the acquisition results to a positive NPV and thus, should be displace to the home space for approval.To solve the issue, QMSC should use EVA instead of ROA as the round of district and manager performance. Since EVA is the best proxy for shareholder survey at the business unit level, improving EVA will also improve the social clubs overall performance. The managers district objectives will then be harmonious with the participations overall objectives. This will induce Mr. Richards to employ spare assets which will promote the growth of both the Columbus district and QMSC, such as the one in Ms. Barrets proposal. The purchase of the new processing equipment is also in line with the companys objective to unfold techniques and marketing program that would increase market share in determine industries and geographic markets of specialty metal users. Having the equipment will allow QMSC to provide the hold for processed metals in the Columbus District with a short school principal time, addressing the concern of potential customers.Another aspect of the issue that needs to be looked into is the decision on what assets should be included in the investment base and what expenses should be charged from profits. QMSC includes land, warehouse buildings, and equipment at gross book value in its inve stment base. This results to an EVA that signals a decrease in profitability during the aboriginal years of the assets when in fact, profits increased. It will be better for the company to use annuity depreciation so that the profitability calculations will show the correct EVA. Leased buildings and equipment are also part of the asset base. This motivates managers to admit rather own assets whenever the interest charge that is built into the rental follow is less than the capitalcharge that is applied to the investment base.Thus, the head office must think carefully before approving the leases of the districts as the managers ability just be using it to window dress their performance. QMSC also includes stock and accounts receivables, without subtracting standard accounts payable, using average values for the period. This is a good blueprint because these are representative of the assets used during the period and thus, conceptually a cheering measure of the amount that shou ld be related to profits. On the other hand, QMSCs computation for district profits is a fair approach because it alone considers expenses that can be controlled by the district managers.

Europe Economic Crisis

ISSN 0379-0991 frugalal Crisis in europium Ca substance abuses, Consequences and Responses EUROPEAN miser delimitss 72009 EUROPEAN COMMISSION The europiuman Economy series contains on the whole substantial(predicate) reports and communications from the focusing to the Council and the Parliament on the stinting place and developments, more than(prenominal) as the stinting forecasts, the annual EU saving re muckle and the institution ? nances in EMU report. Subscription terms are shown on the back get the picture and details on how to obtain the list of sales agents are shown on the inside back c e precisewhere.Un slight differentwise indicated, the texts are published under the duty of the Directo ordain-General for Economic and fiscal Affairs of the European delegating, BU24, B-1049 jacket crown of Belgium, to which enquiries other than those related to sales and subscriptions should be addressed. LEGAL NOTICE Neither the European Commission nor all person ac ting on its be half(a) whitethorn be held responsible for the use which may be made of the in defining contained in this publication, or for most(prenominal) errors which, despite careful prepa ration and checking, may appear.More information on the European junction is available on the Internet (http//europa. eu). Cataloguing data mess be found at the end of this publication. hood of Luxembourg Of? ce for Of? cial Publications of the European Communities, 2009 ISBN 978-92-79-11368-0 inside 10. 2765/845 40 European Communities, 2009 Reproduction is authorised provided the source is acknow directged. Printed in Luxembourg European Commission Directo post-General for Economic and pecuniary Affairs Economic Crisis in Europe Causes, Consequences and ResponsesEUROPEAN ECONOMY 7/2009 FOREWORD The European delivery is in the midst of the lateest recession since the 1930s, with strong gross domestic product projected to shrink by some 4% in 2009, the sharpest contr run in the his tory of the European Union. Although signs of improvement check appeared upstartly, retrieval body uncertain and fragile. The EUs response to the strike downturn has been swift and decisive. Aside from concealjection to stabilise, restore and rectify the entrusting domain, the European Economic Re tipy Plan (EERP) was launched in December 2008.The accusing of the EERP is to restore confidence and bolster reach by a interconnected injection of purchasing power into the economy complemented by st prescribegic enthronisations and measures to develop ashore up argument and childbed markets. The overall pecuniary in tack together, including the make of semiautomatic stabilisers, amounts to 5% of GDP in the EU. According to the Commissions analysis, unless policies take up the impudently challenges, achievable GDP in the EU could fall to a for good refuse trajectory, due to several(prenominal) factors. First, protracted spells of un implementment in the act ionforce ply to pack to a permanent loss of skills.Second, the memory of equipment and infrastructure impart decr easiness and change state obsolete due to lower investment. Third, innovation may be hampered as spending on research and development is sensation of the first outlays that businesses cut back on during a recession. extremity declares harbor implemented a range of measures to provide temporary support to labour markets, encouragement investment in public infrastructure and support companies. To master that the recovery takes give suck and to maintain the EUs harvest dominanceity in the farsighted-run, the focus must increasingly shift from short-run demand management to supply-side morphologic measures.Failing to do so could impede the restructuring process or create harmful distortions to the Internal Market. Moreover, eon take a leakly necessary, the bold pecuniary fore look comes at a approach. On the current course, public debt in the euro re gion is projected to reach ampere-second% of GDP by 2014. The stability and out suppuration Pact provides the flexibility for the necessary m cardinaltary stimulation in this severe downturn, unless desegregation is inevi tabularize once the recovery takes hold and the danger of an stinting relapse has diminished satisfactoryly.While respecting obligations under the Treaty and the perceptual constancy and Growth Pact, a differentiated cuddle crossways countries is appropriate, t kindredg into scoreing the footfall of recovery, fiscal positions and debt levels, as rise as the projected be of ageing, external im eternal rests and trys in the monetary sphere. Preparing gnarl st enjoingies now, non only for fiscal stimulant, just now in any show window for government support for the financial arena and hard-hit industries, allow for enhance the stiffness of these measures in the short term, as this depends upon clarity regarding the pace with which much(pr enominal) measures leave be withdrawn.Since financial markets, businesses and consumers are forward-looking, expectations are factored into last make today. The precise timing of fade strategies leave depend on the strength of the recovery, the exposure of section States to the crisis and prevailing internal and external im oddments. use of the fiscal arousal stemming from the EERP will taper off in 2011, except needs to be followed up by size of itable fiscal consolidation in following years to reverse the unsustainable debt build-up.In the financial sector, government guarantees and holdings in financial institutions will need to be gradually unwound as the mysterious sector gains strength, speckle carefully balancing financial stability with battle considerations. Close coordination will be meaning(a). Vertical coordination minglight-emitting diode with the various strands of economic insurance (fiscal, structural, financial) will check into that the secession of government measures is properly sequenced an important consideration as turning points may differ across insurance worlds. Horizontal coordination between Member States will attend them to suspend or manage cross-border economic spillover cause, to benefit from shared learning and to leverage relationships with the foreign world. Moreover, within the euro area, close coordination will mark that Member States product trajectories do non diverge as the economy recovers. Addressing the underlying causes of diverging battle must be an integral part of any sink schema.The exit schema should likewise ensure that Europe maintains its place at the limit of the low- carbon copy revolution by investing in re modable energies, low carbon technologies and green infrastructure. The aim of this study is to provide the analytical underpinning of such a coordinated exit system. Marco Buti Director-General, DG Economic and fiscal Affairs, European Commission ABBREVIATIONS AND SYMBOL S USED Member States BE BG CZ DK DE EE EL ES FR IE IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK EA-16 EU-10 EU-15 EU-25 EU-27 Currencies EUR BGN CZK DKK EEK GBP HUF JPY LTL LVL PLN RON SEKBelgium Bulgaria Czech Republic Denmark Ger umteen Estonia Greece Spain France Ireland Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta The lowestherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden united farming European Union, Member States having adopted the single attribute (BE, DE, EL, SI, SK, ES, FR, IE, IT, CY, LU, MT, NL, AT, PT and FI) European Union Member States that joined the EU on 1 May 2004 (CZ, EE, CY, LT, LV, HU, MT, PL, SI, SK) European Union, 15 Member States before 1 May 2004 (BE, DK, DE, EL, ES, FR, IE, IT, LU, NL, AT, PT, FI, SE and UK) European Union, 25 Member States before 1 January 2007 European Union, 27 Member States euro in the buff Bulgarian lev Czech koruna Danish krone Estonian kroon tucker sterling Hungarian forint lacquerese yen Lithuanian litas Latvian lats New Polish zloty New Romanian leu Swedish krona iv SKK USD Slovak koruna US dollar Other abbreviations BEPG Broad Economic Policy Guidelines CESR Committee of European Securities Regulators EA Euro area ECB European Central money box ECOFIN European Council of Economics and finance Ministers EDP Excessive deficit procedure EMU Economic and financial union ERM II Exchange Rate Mechanism, mark II ESCB European System of Central Banks Eurostat Statistical Office of the European Communities FDI Foreign reign over investment GDP Gross domestic product GDPpc Gross municipal Product per capita GLS Generalised least squares HICP Harmonised index of consumer sets HP Hodrick-Prescott filterICT breeding and communications technology IP Industrial Production MiFID Market in Financial Instruments Directive NAWRU Non accelerating wage inflation rate of unemployment NEER Nominal legal swap rate NMS New Member States OCA Optimum currency area OLS Ordinary least squares R Research and development RAMS lately Acceded Member States REER Real powerful exchange rate SGP perceptual constancy and Growth Pact TFP Total factor productivity ULC Unit labour cost VA Value added VAT Value added valuate v ACKNOWLEDGEMENTS This special sport of the EU Economy 2009 Review Economic Crisis in Europe Causes, Consequences and Responses was prompt under the responsibility of Marco Buti, Director-General for Economic and Financial Affairs, and Istvan P. Szekely, Director for Economic Studies and Research. capital of Minnesota van den Noord, Adviser in the Directorate for Economic Studies and Research, served as the worldwide editor of the report.The report has drawn on substantive contri barelyions by Ronald Albers, Alfonso Arpaia, Uwe Bower, Declan Costello, Jan in t Veld, Lars Jonung, Gabor Koltay, Willem Kooi, Gert-Jan Koopman, Martin Hradisky, Julia Lendvai, Mauro Griorgo Marrano, Gilles Mourre, Michal Narozny, Moises Orellana Pena, Dario Pate rnoster, Lucio Pench, Stephanie Riso, Werner Roger, Eric Ruscher, Alessandra Tucci, Alessandro Turrini, Lukas Vogel and Guntram Wolff. The report benefited from extensive comments by John Berrigan, Daniel Daco, Oliver Dieckmann, Reinhard Felke, Vitor Gaspar, Lars Jonung, Sven Langedijk, bloody shame McCarthy, Matthias Mors, Andre Sapir, Massimo Suardi, Istvan P. Szekely, Alessandro Turrini, Michael Thiel and David Vergara. Statistical assistance was provided by Adam Kowalski, Daniela Porubska and Christopher Smyth. Adam Kowalski and Greta Haems were responsible for the lay-out of the report.Comments on the report would be gratefully received and should be sent, by spot or e-mail, to Paul van den Noord European Commission Directorate-General for Economic and Financial Affairs Directorate for Economic Studies and Research Office BU-1 05-189 B-1049 Brussels E-mail paul. emailprotected europa. eu vi CONTENTS Executive Summary 1. 2. 3. A crisis of historic proportions Vast indemnity c hallenges A strong call on EU coordination 1 1 1 5 Part I digit of the crisis 1. Root causes of the crisis 1. 1. 1. 2. 1. 3. admission A chronology of the main tear downts Global forces keister the crisis basis spacious crises in the past The insurance response consequently and now Lessons from the past 7 8 8 9 10 2. The crisis from a historical perspective 2. 1. 2. 2. 2. 3. 2. 4. 14 14 14 18 20 Part II Economic consequences of the crisis 1. Impact on existing and potential ripening 1. 1. 1. 2. 1. 3. 1. 4.Introduction The bushel on economic occupation A symmetric shock with asymmetric implications The reach of the crisis on potential harvest-festival Introduction Recent developments wear down market expectations A comparison with recent recessions Introduction Tracking developments in fiscal deficits Tracking public debt developments monetary stress and sovereign put on the line spreads Introduction rootages of global im eases Global im proportionatenesss since the crisis Implications for the EU economy 23 24 24 24 27 30 2. Impact on labour market and employment 2. 1. 2. 2. 2. 3. 2. 4. 35 35 35 37 38 3. Impact on budgetary positions 3. 1. 3. 2. 3. 3. 3. 4. 41 41 41 43 44 4. Impact on global imbalances 4. 1. 4. 2. 4. 3. 4. 4. 46 46 46 48 50 Part 3Policy responses 1. A primer on financial crisis policies 1. 1. 1. 2. 1. 3. Introduction The EU crisis insurance constitution modelling The importance of EU coordination 55 56 56 58 59 2. Crisis control and mitigation 62 vii 2. 1. 2. 2. 2. 3. 2. 4. Introduction Banking support Macroeconomic policies Structural policies Introduction Crisis law of closure policies Crisis barion Introduction The hunt of crisis resolution The role of EU coordination 62 62 64 71 3. Crisis resolution and retardion 3. 1. 3. 2. 3. 3. 78 78 78 80 4. Policy challenges ahead 4. 1. 4. 2. 4. 3. 82 82 82 85 References 87 LIST OF TABLES II. 1. 1. II. 1. 2. III. 1. 1. III. 2. 1. III. 2. 2.Main features of the Commission foreca st The Commission forecast by demesne Crisis constitution modellings a conceptional illustration Public interventions in the tilling concerning sector Labour market and social protection measures in Member States recovery programmes 71 27 27 58 63 LIST OF GRAPHS I. 1. 1. I. 1. 2. I. 1. 3. I. 1. 4. I. 1. 5. I. 1. 6. I. 1. 7. I. 2. 1. I. 2. 2. I. 2. 3. I. 2. 4. I. 2. 5. I. 2. 6. II. 1. 1. II. 1. 2. II. 1. 3. II. 1. 4. II. 1. 5. II. 1. 6. II. 1. 7. intercommunicate GDP harvest for 2009 Projected GDP yield for 2010 3-month inter verify spreads vs T-bills or OIS Bank loaning to private economy in the euro area, 2000-09 Corporate 10 year-spreads vs.Government in the euro area, 2000-09 Real house prices, 2000-09 Stock markets, 2000-09 GDP levels during troika global crises knowledge base average of own tariffs for 35 countries, 1865-1996, un-weighted average, per cent of GDP valet industrial output during the colossal Depression and the current crisis The decline in world trade during the crisis of 1929-1933 The decline in world trade during the crisis of 2008-2009 Unemployment order during the with child(p) Depression and the present crisis in the US and Europe Bank add standards Manufacturing PMI and world trade Quarterly growth rates in the EU Construction legal action and current account position Growth stem in current account tautological countries Growth compostion of current account deficit countries Potential growth 2007-2013, euro area 18 24 24 27 29 30 30 31 15 16 16 16 8 8 9 10 10 12 12 15 viii II. 1. 8. II. 1. 9. II. 1. 10. II. 2. 1. II. 2. 2. II. 2. 3. II. 2. 4. II. 2. 5. II. 2. 6. II. 2. 7. II. 2. 8. II. 2. 9. II. 2. 10. II. 2. 11. II. 2. 12. II. 3. 1. II. 3. 2. II. 3. 3. II. 3. 4. II. 3. 5. II. 3. 6. II. 3. 7. II. 3. 8. II. 4. 1. II. 4. 2. II. 4. 3. II. 4. 4. II. 4. 5. III. 2. 1. III. 2. 2. III. 2. 3. III. 2. 4. III. 2. 5. III. 2. 6. III. 2. 7. III. 2. 8. III. 2. 9. III. 2. 10.Potential growth 2007-2013, euro outs Potential growth 200 7-2013, closely recently acceding Member States Potential growth by Member State Unemployment rates in the European Union Employment growth in the European Union Unemployment and unemployment expectations Unemployment and hours worked Change in monthly unemployment rate Italy Unemployment expectations over nigh 12 months (Consumer survey) Italy Change in monthly unemployment rate Germany Unemployment expectations over next 12 months (Consumer survey) Germany Change in monthly unemployment rate France Unemployment expectations over next 12 months (Consumer survey) France Change in monthly unemployment rate joined earth Unemployment expectations over next 12 months (Consumer survey) unite acres Tracking the fiscal position against previous cussing crises Change in fiscal position and employment in construction Change in fiscal position and real house prices financial positions by Member State Tracking general government debt against previous banking crises Gross public d ebt Fiscal billet by Member State, 2009 Fiscal space and risk premia on government bond yields Current account balances Trade balance in GCC countries and oil prices The US trade deficit The Euro Area trade balance Chinas GDP growth rate and current account to GDP ratio Macroeconomic policy mingle in the euro area Macroeconomic policy mix in the United Kingdom Macroeconomic policy mix in the United States Central bank policy rates ECB policy and eurozone overnight rates Central bank balance sheets Fiscal stimulus in 2009 Fiscal stimulus in 2010 Output gap and fiscal stimulus in 2009 Fiscal space and fiscal stimulus in 2009 31 31 32 35 36 37 38 40 40 40 40 40 40 40 40 41 42 42 42 43 44 44 45 46 49 50 51 52 65 65 65 66 66 66 67 68 68 69 LIST OF BOXES I. 1. 1. I. 2. 1. II. 1. 1. II. 1. 2. II. 1. 3. II. 1. 4. II. 4. 1. III. 1. 1.Estimates of financial market losings keen flows and the crisis of 1929-1933 and 2008-2009 Impact of identification losings on the real economy The growth i mpact of the current and previous crises Financial crisis and potential growth econometric show up Financial crisis and potential growth picture from simulations with request Making sense of recent Chinese trade data. Concise calendar of EU policy actions 11 17 25 28 33 34 49 57 ix III. 2. 1. III. 2. 2. III. 2. 3. III. 2. 4. Measuring the economic impact of fiscal stimulus under the EERP EU balance of payments assistance Labour market and social protection crisis measures examples of good practice EU-level financial contributions 70 73 76 77 x EXECUTIVE SUMMARY assively liqui successiond their positions and stock markets went into a tailspin. From then onward the EU economy entered the steepest downturn on record since the 1930s. The transmission of financial bother to the real economy evolved at record speed, with realization restraint and sagging confidence hitting business investment and household demand, notably for consumer durables and housing. The cross-border transmissi on was in addition passing fast, due to the tight connections within the financial outline itself and also the mightilyly integrated supply chains in global product markets. EU real GDP is projected to shrink by some 4% in 2009, the sharpest concretion in its history.And although signs of an incipient recovery abound, this is expected to be rather sluggish as demand will remain cast down due to deleveraging across the economy as well as direful appointments in the industrial structure. Unless policies change considerably, potential output growth will suffer, as parts of the capital stock are obsolete and increase risk aversion will weigh on capital formation and R&D. The ongoing recession is olibanum likely to leave deep and huge-lasting traces on economic performance and entail social rigourousness of many kinds. Job losings shag be contained for some metre by flexible unemployment benefit arrangements, but eventually the impact of speedyly rising unemployment will be felt, with downturns in housing markets occurring simultaneously modify (notably highly-indebted) households.The fiscal positions of governments will continue to deteriorate, not only for cyclical reasons, but also in a structural manner as task bases shrink on a permanent basis and contingent liabilities of governments stemming from bank bears may materialise. An open question is whether the crisis will weaken the incentives for structural restore and in that respectby indecently affect potential growth win, or whether it will provide an opportunity to undertake far-reaching policy actions. 2. VAST POLICY CHALLENGES 1. A CRISIS OF HISTORIC PROPORTIONS The financial crisis that hit the global economy since the summer of 2007 is without causation in post-war economic history. Although its size and extent are exceptional, the crisis has many features in common with uniform financial-stress driven recession episodes in the past.The crisis was preceded by long terminus of rapid credit growth, low risk bounteousnesss, abundant approachability of fluidity, strong leveraging, soaring plus prices and the development of bubbles in the real country sector. Over-stretched leveraging positions rendered financial institutions extremely vulnerable to corrections in as bewilder markets. As a result a turn-around in a relatively small corner of the financial system (the US subprime market) was sufficient to tilt the whole structure. Such episodes exact happened before (e. g. Japan and the Nordic countries in the early 1990s, the Asian crisis in the late-1990s). However, this time is different, with the crisis being global akin to the events that triggered the huge Depression of the 1930s.While it may be appropriate to consider the Great Depression as the best benchmark in terms of its financial triggers, it has also served as a great lesson. At present, governments and telephone exchange banks are well aware of the need to avoid the policy mistakes t hat were common at the time, both in the EU and elsewhere. Large-scale bank runs cause been avoided, monetary policy has been eased high-pressurely, and governments consume released substantial fiscal stimulus. Unlike the live on during the Great Depression, countries in Europe or elsewhere have not resorted to protectionism at the scale of the 1930s. It demonstrates the importance of EU coordination, even if this crisis provides an opportunity for throw out elevate in this regard.In its early stages, the crisis manifested itself as an acute liquidness deficit among financial institutions as they experienced ever stiffer market conditions for rolling over their (typically shortterm) debt. In this phase, concerns over the solvency of financial institutions were increasing, but a general crinkle was deemed unlikely. This scholarship dramatically changed when a study US investment bank (Lehman Brothers) defaulted in family line 2008. Confidence dampd, investors The curre nt crisis has demonstrated the importance of a coordinated manikin for crisis management. It should contain the following building blocks Crisis taproom to prevent a repeat in the future. This should be mapped onto a collective 1 European Commission Economic Crisis in Europe Causes, Consequences and Responses udgment as to what the booster cable causes of the crisis were and how changes in macroeconomic, regulatory and supervisory policy frameworks could admirer prevent their recurrence. Policies to boost potential economic growth and competitiveness could also bolster the resiliency to future crises. Crisis control and mitigation to minimise the damage by preventing general defaults or by containing the output loss and easing the social hardness stemming from recession. Its main objective is thus to stabilise the financial system and the real economy in the short run. It must be coordinated across the EU in order to strike the right balance between home(a) preoccupations and spillover effects affecting other Member States. Crisis resolution to aim crises to a lasting close, and at the lowest possible cost for the taxpayer while containing general risk and securing consumer protection. This requires reversing temporary support measures as well action to restore economies to sustainable growth and fiscal paths. Inter alia, this includes policies to restore banks balance sheets, the restructuring of the sector and an natty policy exit. An orderly exit strategy from expansionary macroeconomic policies is also an prerequisite part of crisis resolution. The beginnings of such a framework are emergent, building on existing institutions and legislation, and complemented by clean initiatives.But of course policy makers in Europe have had no choice but to employ the existing mechanisms and procedures. A framework for financial crisis prevention appeared, with hindsight, to be developing otherwise the crisis would most likely not have happened. The same held authoritative to some extent for the EU framework for crisis control and mitigation, at least at the initial stages of the crisis. Quite naturally, most EU policy efforts to date have been in the pursuit of crisis control and mitigation. But first travel have also been taken to redesign financial regulation and charge both in Europe and elsewhere with a view to crisis prevention. By contrast, the adoption of crisis resolution policies has not begun in earnest yet.This is now proper urgent not least because it should underpin the effectiveness of control policies via its impact on confidence. 2. 1. Crisis control and mitigation Aware of the risk of financial and economic meltdown central banks and governments in the European Union embarked on considerable and coordinated policy action. Financial rescue policies have focused on restoring liquidity and capital of banks and the grooming of guarantees so as to get the financial system public presentation again. Deposit gu arantees were raised. Central banks cut policy refer rates to unprecedented lows and gave financial institutions access to lender-of-last-resort facilities.Governments provided liquidity facilities to financial institutions in distress as well, along with plead guarantees on their liabilities, soon followed by capital injections and impaired summation relief. Based on the coordinated European Economy recovery Plan (EERP), a discretionary fiscal stimulus of some 2% of GDP was released of which two-thirds to be implemented in 2009 and the sell in 2010 so as to hold up demand and ease social hardship. These measures for the most part respected agreed principles of being timely and targeted, although there are concerns that in some flakes measures were not of a temporary record and therefore not easily reversed.In addition, the Stability and Growth Pact was utilize in a flexible and supportive manner, so that in most Member States the automatic fiscal stabilisers were allowed to operate unfettered. The dispersion of fiscal stimulus across Member States has been substantial, but this is generally and appropriately in line with differences in terms of their needs and their fiscal room for manoeuvre. In addition, to avoid unnecessary and irreversible destruction of (human and entrepreneurial) capital, support has been provided to hard-hit but viable industries while part-time unemployment claims were allowed on a temporary basis, with the EU taking the lead in developing guidelines on the design of labour market policies during the crisis.The EU has played an important role to provide guidance as to how enounce aid policies including to the financial sector could be shaped so as to pay respect to competition rules. Moreover, the EU has provided balance-of payments assistance jointly with the IMF and World Bank to Member States in Central and Eastern Europe, as these have been exposed to reversals of international capital flows. 2 Executive Summary Fina lly, rail EU support to economic activity was provided through advantageously change magnitude loan support from the European Investment Bank and the accelerated outgo of structural specie. These crisis control policies are gravidly achieving their objectives.Although banks balance sheets are save vulnerable to higher mortgage and credit default risk, there have been no defaults of major(ip) financial institutions in Europe and stock markets have been recovering. With short-term worry rates near the zero mark and non-conventional monetary policies boosting liquidity, stress in interbank credit markets has receded. Fiscal stimulus proves relatively effective owing to the liquidity and credit constraints facing households and businesses in the current environment. Economic contraction has been stemmed and the number of job losses contained relative to the size of the economic contraction. 2. 2. Crisis resolution ontext, the reluctance of many banks to reveal the dependable st ate of their balance sheets or to exploit the extremely favourable earning conditions induced by the policy support to repair their balance sheets is of concern. It is important as well that financial repair be done at the lowest possible long-term cost for the tax payer, not only to win political support, but also to secure the sustainability of public finances and avoid a long-lasting increase in the tax burden. Financial repair is thus prerequisite to secure a satisfactory rate of potential growth not least also because innovation depends on the availability of risk financing. Macroeconomic policies. Macroeconomic stimulus both monetary and fiscal has been utilise extensively.The challenge for central banks and governments now is to continue to provide support to the economy and the financial sector without compromising their stability-oriented objectives in the medium term. While withdrawal of monetary stimulus motionless looks some way off, central banks in the EU are de termined to unwind the supportive stance of monetary policies once inflation drive begins to emerge. At that point a apt exit strategy for fiscal policy must be heavily in place in order to pre-empt pressure on governments to set back or call off the consolidation of public finances. The fiscal exit strategy should spell out the conditions for stimulus withdrawal and must be credible, i. e. ased on pre-committed reforms of entitlements programmes and anchored in national fiscal frameworks. The withdrawal of fiscal stimulus under the EERP will be quasi automatic in 2010-11, but needs to be followed up by very substantial though differentiated across Member States fiscal consolidation to reverse the adverse trends in public debt. An appropriate mix of expenditure restraint and tax increases must be pursued, even if this is challenging in an environment where distributional conflicts are likely to arise. The quality of public finances, including its impact on work incentives and economic efficiency at large, is an overarching concern. Structural policies.Even prior to the financial crisis, potential output growth was expected to roughly halve to as half-size as around 1% by the While there is still major uncertainty surrounding the pace of economic recovery, it is now essential that exit strategies of crisis control policies be designed, and committed to. This is necessary both to ensure that current actions have the desired effects and to secure macroeconomic stability. Having an exit strategy does not involve announcing a fixed calendar for the next moves, but rather defines those moves, including their direction and the conditions that must be satisfied for making them. Exit strategies need to be in place for financial, macroeconomic and structural policies alike Financial policies.An immediate priority is to restore the viability of the banking sector. Otherwise a vicious circle of weak growth, more financial sector distress and ever stiffer credit c onstraints would inhibit economic recovery. Clear commitments to restructure and merge the banking sector should be put in place now if a Japan-like lost decade is to be avoided in Europe. Governments may hope that the financial system will grow out of its problems and that the exit from banking support would be relatively calm. But as long as there remains a lack of transparency as to the value of banks assets and their vulnerability to economic and financial developments, uncertainty remains. In this 3European Commission Economic Crisis in Europe Causes, Consequences and Responses 2020s due to the ageing population. But such low potential growth rates are likely to be recorded already in the years ahead in the wake of the crisis. As noted, it is important to resolutely repair the semipermanent-term viability of the banking sector so as to boost productivity and potential growth. But this will not suffice and efforts are also require in the area of structural policy proper. A sound strategy should include the exit from temporary measures supporting particular sectors and the preservation of jobs, and freeze off the adoption or expansion of schemes to withdraw labour supply.Beyond these defensive objectives, structural policies should include a review of social protection systems with the emphasis on the prevention of persistent unemployment and the promotion of a longer work life. further labour market reform in line with a flexicuritybased approach may also help avoid the experiences of past crises when hysteresis effects led to sustained period of very high unemployment and the permanent exclusion of some from the labour force. Product market reforms in line with the priorities of the Lisbon strategy (implementation of the single market programme especially in the area of services, measures to strangle administrative burden and to promote R and innovation) will also be distinguish to raising productivity and creating new employment opportunities.Th e transition to a low-carbon economy should be pursued through the integration of environmental objectives and instruments in structural policy choices, notably taxation. In all these areas, policies that bind a low budgetary cost should be prioritised. 2. 3. Crisis prevention particular in China, into the world economy. This prompted conjunct monetary and fiscal policies. Buoyant financial conditions also had microeconomic roots and these tended to interact with the favourable macroeconomic environment. The list of modify factors is long, including the development of complex but poorly supervised financial products and profuse short-term risk-taking.Crisis prevention policies should tackle these deficiencies in order to avoid repetition in the future. There are again agendas for financial, macroeconomic and structural policies Financial policies. The agenda for regulation and supervision of financial markets in the EU is vast. A number of initiatives have been taken already , while in some areas major efforts are still needed. Action plans have been put forward by the EU to strengthen the regulatory framework in line with the G20 regulatory agenda. With the majority of financial assets held by cross-border banks, an ambitious reform of the European system of supervision, based on the recommendations made by the High- take aim Group chaired by Mr Jacques de Larosiere, is under discussion.Initiatives to achieve better remuneration policies, regulatory coverage of hedge silver and private equity funds are being considered but have yet to be legislated. In many other areas progress is lagging. Regulation to ensure that enough provisions and capital be put aside to cope with difficult times needs to be developed, with history frameworks to evolve in the same direction. A certain degree of third estate and consistency across the rule books in Member States is important and a single regulatory rule book, as soon as feasible, desirable. It is essential that a robust and effective bank stabilisation and resolution framework is developed to govern what happens when supervision fails, including effective deposit protection.Consistency and coherence across the EU in dealing with problems in such institutions is a report requisite of a much improved operational and regulatory framework within the EU. Macroeconomic policies. Governments in many EU Member States ran a relatively A broad consensus is emerging that the ultimate causes of the crisis reside in the public presentation of financial markets as well as macroeconomic developments. in the lead the crisis broke there was a strong belief that macroeconomic asymmetry had been eradicated. Low and stable inflation with sustained economic growth (the Great Moderation) were deemed to be lasting features of the developed economies.It was not sufficiently appreciated that this owed much to the global disinflation associated with the favourable supply conditions stemming from the integrat ion of surplus labour of the emerging economies, in 4 Executive Summary accommodative fiscal policy in the good times that preceded the crisis. Although this plentynot be seen as the main culprit of the crisis, such behaviour limits the fiscal room for manoeuvre to respond to the crisis and can be a factor in producing a future one by undermining the longer-term sustainability of public finances in the face of aging populations. Policy agendas to prevent such behaviour should thus be prominent, and call for a stronger organize role for the EU alongside the adoption of credible national medium-term frameworks.Intra-area adjustment in the Economic and Monetary Union (which constitutes two-thirds of the EU) will need to become smoother in order to prevent imbalances and the associated vulnerabilities from building up. This reinforces earlier calls, such as in the Commissions emailprotected report (European Commission, 2008a), to broaden and deepen the EU control to include intra-are a competitiveness positions. Structural policies. Structural reform is among the most powerful crisis prevention policies in the longer run. By boosting potential growth and productivity it eases the fiscal burden, facilitates deleveraging and balance sheet restructuring, improves the political economy conditions for correcting cross-country imbalances, makes income redistribution writes less onerous and eases the terms of the inflation-output trade-off.Further financial development and integration can help to improve the effectiveness of and the political incentives for structural reform. at the Heads of State Level in the autumn of 2008 for the first time in history also of the Eurogroup to coordinate these moves. The Commissions role at that stage was to provide guidance so as to ensure that financial rescues attain their objectives with minimal competition distortions and shun spillovers. Fiscal stimulus also has cross-border spillover effects, through trade and financial m arkets. Spillover effects are even stronger in the euro area via the transmission of monetary policy responses.The EERP adopted in November 2008, which has defined an effective framework for coordination of fiscal stimulus and crisis control policies at large, was motivated by the recognition of these spillovers. At the crisis resolution stage a coordinated approach is necessary to ensure an orderly exit of crisis control policies across Member States. It would not be envisaged that all Member State governments exit at the same time (as this would be dictated by the national specific circumstances). But it would be important that state aid for financial institutions (or other severely affected industries) not persist for longer than is necessary in view of its mplications for competition and the functioning of the EU Single Market. National strategies for a return to fiscal sustainability should be coordinated as well, for which a framework exists in the form of the Stability and G rowth Pact which was designed to tackle spillover risks from the outset. The rationales for the coordination of structural policies have been spelled out in the Lisbon Strategy and apply also to the exits from temporary intervention in product and labour markets in the face of the crisis. At the crisis prevention stage the rationale for EU coordination is rather straightforward in view of the high degree of financial and economic integration.For example, regulatory reform gear to crisis prevention, if not coordinated, can lead to regulatory arbitrage that will affect location choices of institutions and may change the direction of international capital flows. Moreover, with many financial institutions operating cross border there is a 3. A STRONG CALL ON EU COORDINATION The rationale for EU coordination of policy in the face of the financial crisis is strong at all 3 stages control and mitigation, resolution and prevention At the crisis control and mitigation stage, EU policy ma kers became acutely aware that financial assistance by residence countries of their financial institutions and unilateral extensions of deposit guarantees entail large and potentially disrupting spillover effects. This led to emergency summits of the European Council 5European Commission Economic Crisis in Europe Causes, Consequences and Responses clear case for exchange of information and burden sharing in case of defaults. The financial crisis has clearly strengthened the case for economic policy coordination in the EU. By coordinating their crisis policies Member States heighten the credibility of the measures taken, and thus help restore confidence and support the recovery in the short term. Coordination can also be crucial to fend off protectionism and thus serves as a safeguard of the Single Market. Moreover, coordination is necessary to ensure a smooth functioning of the euro area where spillovers of national policies are particularly strong.And coordination provides incenti ves at the national level to implement growth friendly economic policies and to orchestrate a return to fiscal sustainability. Last but not least, coordination of external policies can contribute to a more rapid global solution of the financial crisis and global recovery. EU frameworks for coordination already exist in many areas and could be developed further in some. In several areas the EU has a direct responsibility and thus is the highest authority in its jurisdiction. This is the case for notably monetary policy in the euro area, competition policy and trade negotiations in the framework of the DOHA Round. This is now proving more useful than ever. In other areas, bottom-up EU coordination frameworks have been developed and should be exploited to the full.The pursuit of the regulatory and supervisory agenda implies the set-up of a new EU coordination framework which was long overdue in view of the integration of financial systems. An important framework for coordination of fis cal policies exists under the aegis of the Stability and Growth Pact. The revamped Lisbon strategy should serve as the main framework for coordination of structural policies in the EU. The balance of payment assistance provided by the EU is another area where a coordination framework has been established recently, and which could be exploited also for the coordination of policies in the pursuit of economic convergence. At the global level, finally, the EU can offer a framework for the coordination of positions in e. g. the G20 or the IMF.With the US adopting its own exit strategy, pressure to raise demand elsewhere will be mounting. The adjustment requires that emerging countries such as China reduce their national saving surplus and changed their exchange rate policy. The EU will be more effective if it also considers how policies can contribute to more balanced growth worldwide, by considering bolstering progress with structural reforms so as to raise potential output. In addition , the EU would facilitate the pursuit of this agenda by leveraging the euro and participating on the basis of a single position. 6 Part I Anatomy of the crisis 1. 1. 1. ROOT CAUSES OF THE CRISIS INTRODUCTIONThe depth and breath of the current global financial crisis is unprecedented in post-war economic history. It has several features in common with like financial-stress driven crisis episodes. It was preceded by relatively long period of rapid credit growth, low risk premiums, abundant availability of liquidity, strong leveraging, soaring asset prices and the development of bubbles in the real estate sector. Stretched leveraged positions and maturity mismatches rendered financial institutions very vulnerable to corrections in asset markets, deteriorating loan performance and disturbances in the wholesale funding markets. Such episodes have happened before and the examples are abundant (e. g.Japan and the Nordic countries in the early 1990s, the Asian crisis in the late-1990s). B ut the key difference between these earlier episodes and the current crisis is its global dimension. When the crisis broke in the late summer of 2007, uncertainty among banks rough the creditworthiness of their counterparts evaporated as they had heavily invested in often very complex and opaque and overpriced financial products. As a result, the interbank market virtually closed and risk premiums on interbank loans soared. Banks approach a serious liquidity problem, as they experienced major difficulties to rollover their short-term debt. At that stage, policymakers still perceived the crisis primarily as a liquidity problem.Concerns over the solvency of individual financial institutions also emerged, but systemic collapse was deemed unlikely. It was also astray believed that the European economy, unlike the US economy, would be largely immune to the financial turbulence. This belief was fed by perceptions that the real economy, though slowing, was thriving on strong fundamental s such as rapid export growth and sound financial positions of households and businesses. These perceptions dramatically changed in September 2008, associated with the rescue of Fannie Mae and Freddy Mac, the bankruptcy of Lehman Brothers and fears of the insurance giant AIG (which was eventually bailed out) taking down major US and EU financial institutions in its wake.Panic broke in stock markets, market valuations of financial institutions evaporated, investors rushed for the few safe havens that were seen to be left (e. g. sovereign bonds), and complete meltdown of the financial system became a genuine threat. The crisis thus began to feed onto itself, with banks forced to restrain credit, economic activity plummeting, loan books deteriorating, banks cutting down credit further, and so on. The downturn in asset markets snowballed rapidly across the world. As trade credit became meagre and expensive, world trade plummeted and industrial firms byword their sales drop and invento ries passel up. Confidence of both consumers and businesses fell to unprecedented lows. graph I. 1. Projected GDP growth for 2009 6 4 2 0 -2 -4 Nov-07 CF-NMS EC-NMS Jan-08 May-08 Mar-08 CF-UK EC-UK Jul-08 Sep-08 CF-EA EC-EA Nov-08 Jun-09 Aug-09 Aug-10 % -4. 0 -4. 3 Oct-09 Oct-10 -6 Feb-09 Sources European Commission, Consensus Forecasts chart I. 1. 2 Projected GDP growth for 2010 6 4 2 0 -2 -4 Nov-08 CF-NMS EC-NMS Jan-09 May-09 Mar-09 CF-UK EC-UK Jul-09 Sep-09 CF-EA EC-EA Dec-09 Feb-10 Jun-10 Apr-10 % -6 Sources European Commission, Consensus Forecasts This set chain of events set the scene for the deepest recession in Europe since the 1930s. Projections for economic growth were rewrite downward at a record pace (graphical records I. 1. 1 and I. 1. 2).Although the contraction now seems to have bottomed, GDP is projected to fall in 2009 by the order of 4% in the euro area and the European Union as whole with a modest pick up in activity expected in 2010. 8 Apr-09 Part I Anatomy of the crisis The situation would undoubtedly have been much more serious, had central banks, governments and supra-national authorities, in Europe and elsewhere, not responded forcefully (see Part III of this report). Policy interest rates have been cut sharply, banks have almost unlimited access to lender-oflast-resort facilities with their central banks, whose balance sheets expanded massively, and have been granted new capital or guarantees from their governments.Guarantees for savings deposits have been introduced or raised, and governments provided substantial fiscal stimulus. These actions give, however, rise to new challenges, notably the need to orchestrate a coordinated exit from the policy stimulus in the years ahead, along with the need to establish new EU and global frameworks for the prevention and resolution of financial crises and the management of systemic risk (see Part III). that point most observers were not yet alerted that systemic crisis would be a threat, bu t this began to change in the spring of 2008 with the failures of dribble Stearns in the United States and the European banks Northern Rock and Landesbank Sachsen.About half a year later, the list of (almost) failed banks had grown long enough to ring the timidity bells that systemic meltdown was around the corner Lehman Brothers, Fannie May and Freddie Mac, AIG, Washington Mutual, Wachovia, Fortis, the banks of Iceland, Bradford & Bingley, Dexia, ABN-AMRO and hypodermic syringe Real Estate. The damage would have been devastating had it not been for the numerous rescue operations of governments. When in September 2008 Lehman Brothers had filed for bankruptcy the TED spreads jumped to an unprecedented high. This made investors even more wary about the risk in bank portfolios, and it became more difficult for banks to raise capital via deposits and shares. Institutions seen at risk could no longer finance themselves and had to sell assets at fire sale prices and restrict their lend ing.The prices of similar assets fell and this reduced capital and lending further, and so on. An adverse feedback loop set in, whereby the economic downturn increased the credit risk, thus eroding bank capital further. The main response of the major central banks in the United States as well as in Europe (see Chapter III. 1 for further detail) has been to cut official attributed to a common systemic factor (see for evidence Eichengreen et al. 2009). 1. 2. A CHRONOLOGY OF THE MAIN EVENTS The heavy exposure of a number of EU countries to the US subprime problem was clearly revealed in the summer of 2007 when BNP Paribas froze redemptions for three investment funds, citing its inability to value structured products. 1 ) As a result, counterparty risk between banks increased dramatically, as reflected in soaring rates supercharged by banks to each other for short-term loans (as indicated by the spreads see Graph I. 1. 3). ( 2 ) At (1) See Brunnermeier (2009). (2) computer address default swaps, the insurance premium on banks portfolios, soared in concert. The bulk of this rise can be bps 500 400 300 200 100 0 Jan-00 Graph I. 1. 3 3-month interbank spreads vs T-bills or OIS Default of Lehman Brothers BNP Paribas suspends the valuation of two mutual funds Jan-01 Jan-02 EUR Jan-03 Jan-04 USD Jan-05 Jan-06 JPY Jan-07 Jan-08 GBP Jan-09 Sources Reuters EcoWin. 9 European Commission Economic Crisis in Europe Causes, Consequences and Responses interest rates to historical lows so as to contain funding cost of banks.They also provided supernumerary liquidity against collateral in order to ensure that financial institutions do not need to resort to fire sales. These measures, which have resulted in a massive expansion of central banks balance sheets, have been largely successful as three-months interbank spreads came down from their highs in the autumn of 2008. However, bank lending to the non-financial incorporate sector continued to taper off (Graph I. 1. 4). Cre dit stocks have, so far, not contracted, but this may merely reflect that corporate borrowers have been forced to maximise the use of existing bank credit lines as their access to capital markets was virtually cut off (risk spreads on corporate bonds have soared, see Graph I. 1. 5). Graph I. 1. Bank lending to private economy in the euro area, 2000-09 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source European Central Bank institutions incentives to sell to the government while giving taxpayers a reasonable expectation that they will benefit in the long run. Financial institutions which at the (new) market prices of toxic assets would be insolvent were recapitalised by the government. all in all these measures were aiming at keeping financial institutions afloat and providing them with the necessary breathing space to prevent a disorderly deleveraging. The verdict as to whether these programmes are sufficient is mixed (Chapter III. 1), but the order of asset relief provided seem to be roughly in line with banks needs (see again Box I. 1. ). Graph I. 1. 5 Corporate 10 year-spreads vs. Government in the euro area, 2000-09 450 350 basis points 250 cl 50 -50 Corp AAA rated Corp A rated Corp composite yield Corp AA rated Corp BBB rated y-o-y percentage change house purchases households Non-financial corporations -150 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source European Central Bank. 1. 3. GLOBAL FORCES BEHIND THE CRISIS Governments soon discovered that the provision of liquidity, while essential, was not sufficient to restore a normal functioning of the banking system since there was also a deeper problem of (potential) insolvency associated with undercapitalisation.The write-downs of banks are estimated to be over 300 trillion US dollars in the United Kingdom (over 10% of GDP) and in the range of over EUR 500 to 800 billion (up to 10% of GDP) in the euro area (see Box I. 1. 1). In October 2008, in Washington and Paris, m ajor countries agreed to put in place financial programmes to ensure capital losses of banks would be counteracted. Governments initially proceeded to provide new capital or guarantees on toxic assets. Subsequently the focus shifted to asset relief, with toxic assets interchange for cash or safe assets such as government bonds. The price of the toxic assets was generally fixed between the fire sales price and the price at maturity to giveThe proximate cause of the financial crisis is the bursting of the property bubble in the United States and the ensuing contamination of balance sheets of financial institutions around the world. But this observation does not explain why a property bubble developed in the first place and why its bursting has had such a devastating impact also in Europe. 1 needs to consider the factors that resulted in excessive leveraged positions, both in the United States and in Europe. These comprise both macroeconomic and developments in the functioning of fin ancial markets. ( 3 ) (3) See for instance Blanchard (2009), Bosworth and Flaaen (2009), Furceri and Mourougane (2009), Gaspar and Schinasi (2009) and Haugh et al. (2009). 10 Part I Anatomy of the crisis Box I. 1. 1 Estimates of financial market losses Estimates of financial sector osses are essential to inform policymakers about the severity of financial sector distress and the possible costs of rescue packages. There are several estimates quantifying the impact of the crisis on the financial sector, most recently those by the national Reserve in the framework of its Supervisory Capital Assessment Program, widely referred to as the stress test. Using different methodologies, these estimates generally cover write-downs on loans and debt securities and are usually referred to as estimates of losses. The estimated losses during the past one and a half years or so have shown a steep increase, reflecting the uncertainty regarding the nature and the extent of the crisis.IMF (2008a) and Hatzius (2008) estimated the losses to US banks to about USD 945 in April 2008 and up to USD 868 million in September 2008, respectively. This is at the lower end of predictions by RGE monitor in February the same year which saw losses in the rage of USD 1 to 2 billion. The April 2009 IMF Global Financial Stability Report (IMF 2009a) puts loan and securities losses originated in Europe (euro area and UK) at USD 1193 billion and those originated in the United States at USD 2712 billion. However, the incidence of these losses by region is more relevant in order to try on the necessity and the extent of policy intervention. The IMF estimates write-downs of USD 316 billion for banks in the United Kingdom and USD 1109 billion (EUR 834 billion) for the euro area.The ECBs loss estimate for the euro area at EUR 488 billion is substantially lower than this IMF estimate, with the discrepancy largely due to the different assumptions about banks losses on debt securities. Bank level estimates can be used in stress tests to evaluate capital adequacy of individual institutions and the banking sector at large. For example the Feds Supervisory Capital Assessment Program found that 10 of the 19 banks examined needed to raise capital of USD 75 billion. Loss estimates can also inform policymakers about the effects of losses on bank lending and the magnitude of intervention needed to pre-empt this. Such calculations require additional assumptions about the capital banks can raise or generate through their profits as well as the amount of deleveraging needed.As an illustration the table below presents four scenarios that differ in their hypothetical recapitalisation rate and their deleveraging effects The IMF and ECB estimates of total write-downs for euro area banks are taken as starting points. Net write-downs are calculated, which reflect losses that are not likely to be covered either by raising capital or by tax deductions. Depending on the scenario net losses range between 219 and 406 billion EUR using the IMF estimate, and roughly half of that based on the ECB estimate. Such magnitudes would connote balance sheets decreases amounting to 7. 3% in the mildest scenario and 30. 8% in the worst case scenario (period between August 2007 and end of 2010). Capital recovery rates and deleveraging play a crucial role in determining the magnitude of the balance sheet effect.Governments capital injections in the euro area have been broadly in line with the magnitude of these illustrative balance sheet effects, committing 226 billion EUR, half of which has been spent (see Chapter III. 1). Table 1 Balance-sheet effects of write-downs in the euro area* Scenario (1) (2) (3) Capital 1760 1760 1760 Assets 31538 31538 31538 Estimated write-downs IMF 834 834 834 ECB 488 488 488 Recapitalisation rate 65% 65% 50% Net write-downs IMF 219 219 313 ECB 128 128 183 minify in balance sheet (leverage constant) IMF -12. 4% -12. 4% -17. 8% ECB -7. 3% -7. 3% -10. 4% Change in lev erage ratio 0% -5% -5% Decrease in balance sheet (with delevraging) IMF -12. 4% -16. 8% -21. % ECB -7. 3% -11. 9% -14. 9% * Billion EUR, EUR/USD exchange rate 1. 33. Source European Commission (4) 1760 31538 834 488 35% 407 238 -23. 1% -13. 5% -10% -30. 8% -22. 2% 11 European Commission Economic Crisis in Europe Causes, Consequences and Responses As noted, most major financial crises in the past were preceded by a sustained period of buoyant credit growth and low risk premiums, and this time is no exception. Rampant optimism was fuelled by a belief that macroeconomic instability was eradicated. The Great Moderation, with low and stable inflation and sustained growth, was conducive to a perception of low risk and high return on capital.In part these developments were underpinned by genuine structural changes in the economic environment, including growing opportunities for international risk sharing, greater stability in policy making and a greater share of (less cyclical) services i n economic activity. Persistent global imbalances also played an important role. The net saving surpluses of China, Japan and the oil producing economies unbroken bond yields low in the United States, whose deep and liquid capital market attracted the associated capital flows. And notwithstanding rising commodity prices, inflation was dumb by favourable supply conditions associated with a strong expansion in labour transferred into the export sector out of rural employment in the emerging market economies (notably China).This enabled US monetary policy to be accommodative amid economic boom conditions. In addition, it may have been kept to a fault loose excessively long in the wake of the dotcom slump, with the federal funds rate persistently below the Taylor rate, i. e. the level consistent with a apathetic monetary policy stance (Taylor 2009). Monetary policy in Japan was also accommodative as it struggled with the aftermath of its late-1980s bubble economy, which entailed so -called carry trades (loans in Japan invested in financial products abroad). This contributed to rapid increases in asset prices, notably of stocks and real estate not only in the United States but also in Europe (Graphs I. 1. 6 and I. 1. 7).A priori it may not be obvious that excess global liquidity would lead to rapid increases in asset prices also in Europe, but in a world with open capital accounts this is unavoidable. To sum up, there are three main transmission channels. First, upward pressure on European exchange rates vis-a-vis the US dollar and currencies with de facto pegs to the US dollar (which includes inter alia the Chinese currency and up to 2004 also the Japanese currency), reduced import inflation and allowed an easier stance of monetary policy. Second, so-called carry trades whereby investors borrow in currencies with low interest rates and invest in higher forsaking currencies while mostly disregarding exchange rate risk, implied the spillover of global liquidit y in European financial markets. 4 ) Third, and perhaps most importantly, large capital flows made possible by the integration of financial markets were turn towards real estate markets in several countries, notably those that saw rapid increases in per capita income from comparatively low initial levels. So it is not affect that money stocks and real estate prices soared in tandem also in Europe, without entailing any upward tendency in inflation of consumer prices to speak of. ( 5 ) Graph I. 1. 6 Real house prices, 2000-09 190 180 clxx 160 150 140 130 120 110 100 90 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Index, 2000 = 100 United States United Kingdom Source OECD euro area euro area excl. Germany 500 400 300 200 100 0 03. 01. 00 12. 10. 00 Graph I. 1. 7 Stock markets, 2000-09 300 200 100 0 27. 07. 01 14. 05. 02 25. 02. 03 05. 12. 03 22. 09. 04 05. 07. 05 12. 04. 06 25. 1. 07 07. 11. 07 22. 08. 08 DJ EURO STOXX (lhs) Source www. stoxx. com DJ Emerging Europe STOXX (rhs ) Aside from the abridge whether US monetary policy in the run up to the crisis was too loose relative to the buoyancy of economic activity, there is a broader issue as to whether monetary policy should lean against asset price growth so as to prevent bubble formation. Monetary policy could be blamed at both sides of the Atlantic for (4) See for empirical evidence confirming these two channels Berger and Hajes (2009). (5) See for empirical evidence Boone and forefront den Noord (2008) and Dreger and Wolters (2009). 12 Part I Anatomy of the crisis cting too narrowly and not reacting sufficiently strongly to indications of growing financial vulnerability. The same holds true for fiscal policy, which may be too narrowly focused on the regular business roll as opposed to the asset cycle (see Chapter III. 1). Stronger emphasis of macroeconomic policy making on macro-financial risk could thus provide stabilisation benefits. This might require explicit concerns for macro-financial stab ility to be included in central banks mandates. Macro-prudential tools could potentially help tackle problems in financial markets and might help limit the need for very aggressive monetary policy reactions. 6 ) Buoyant financial conditions also had microeconomic roots and the list of contributing factors is long. The originate and distribute model, whereby loans were extended and subsequently incase (securitised) and sold in the market, meant that the creditworthiness of the borrower was no longer assessed by the originator of the loan. Moreover, expert change allowed the development of new complex financial products backed by mortgage securities, and credit rating agencies often misjudged the risk associated with these new instruments and attributed unduly triple-A ratings. As a result, risk inherent to these products was underestimated which made them look more attractive for investors than warranted.Credit rating agencies were also susceptible to conflicts of interests as they help developi