Epstein Secrets

terity has been more contractionary than many had expected. A huge gap in competitiveness between the core and the periphery is at the root of the Eurozone's problems. Ger- man labor costs rose by +18% in 2000-2009, significantly less than Italy's +35% and Spain's +50%. Our estimates suggest that Italy

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important contributor to US GDP growth. Growth has also begun to pick up in key areas of the emerging markets, including China and Brazil. While the Eurozone economy remains weak, we expect Q3 2012 to mark the bottom, and that growth will begin to get "less bad" from Q4 2012. Equities Equity markets have

continue to tap the primary market if they ask for a support program? ¢ How much more support will Greece receive and will it be able to stay in the Eurozone next year? CIO View (Probability: 70%*) Austerity and weak growth ¢ We think the Eurozone economy troughed in 3Q. We expect flattish growth in 4Q 20

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36 UBS Economy The successful formation of a Greek government after the June 17 elections has reduced the risk of an imminent Greek exit from the Eurozone. However, the Euro debt crisis persists, and further reform and consolidation efforts in Spain and Italy are needed. In the US, economic data weakene

clients of UBS London in the UK. Where products or services are provided from outside the UK, they will not be covered by the UK regulatory regime or the Financial Services Compensation Scheme. © UBS 2012. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved 36 UBS . HOUSE_OVERSIGHT_02417