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Report on Operations I Group Results
Macroeconomic situation, banking and financial markets (CONTINUED)
in equity markets was accompanied by an upsurge in the mutual
fund industry after broadly based negative performance in 2008. In
this context, mutual fund assets in Italy were up by 6.8% over yearend
2008 to a level of about €430 billion; compared to year-end
2008, fund levels during the period from January to November 2009
rose by 11% in Germany and 7.7% in Austria. Since the beginning
of the year, there was a net overall inflow of funds of €2.7 billion
in Germany alone (excluding institutional funds). However, there
was a net outflow of just €41 million in Austria, which was a major
improvement over the outflow of about €15 billion in December
2008; there was also a net outflow in Italy of €3 billion in 2009,
however, for the seventh month in a row, there was instead a net
inflow of €1.6 billion in December alone.
CEE countries
The economies of Central and Eastern Europe (CEE) suffered
significantly from the international economic crisis in 2009. In 2009,
economic activity dropped by more than 6% in CEE countries (-4%
in the Eurozone); at the same time, the differences in the economic
performance of the various CEE countries rose substantially generally
as a function of the previous overheating of the economy, the state of
health of the banking industry and policies implemented to respond
to the crisis. For example, the Baltic economies suffered some of
the greatest GDP declines in the world, while Poland was the only
country in the European Union to report GDP growth.
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2009 Consolidated Reports and Accounts · UniCredit Group
The tension in CEE economies increased till it peaked in March
2009: this was the most difficult period (country risk at record
levels, weakness in the main currencies in the region, revisions of
agency ratings), but also a significant turning point. Starting then,
it appeared clear that major international institutions would use
any means to support the international economy through massive
stimulus programs, and if necessary, they would support any
country in difficulty. The financial aid of the International Monetary
Fund, in some cases provided only as a precautionary measure,
supported numerous CEE countries (Ukraine, Hungary, Latvia, Bosnia,
Romania, Serbia and Poland) and was in many cases combined
with support provided by major international banks present in these
countries (through the so-called “Vienna initiative”), and accordingly,
international banks were committed to maintaining their exposure to
certain countries, hence avoiding the feared “credit crunch”.
Although the greatest difficulties were seen in CEE at the beginning
of 2009, signs of recovery gradually started to appear in the second
half: economic activity indicators rose noticeably, initially driven by
rebuilding of inventories and bolstered by accommodating, growthoriented
monetary and fiscal policies. The Central European countries
with the strongest ties to the German economy were those that
were first to show that they were able to follow the recovery that
was gaining strength in Germany and other European countries.
Toward the end of 2009, country risk returned to substantially lower
levels than at the beginning of the year, and several CEE currencies
gradually strengthened.