欧州危機拡大 市場が催促する首脳の抜本策

The Yomiuri Shimbun (Dec. 9, 2011)
EU heads must unite to resolve debt crisis
欧州危機拡大 市場が催促する首脳の抜本策(12月8日付・読売社説)

A tense two-day meeting that will determine whether the sovereign debt crisis in Europe can be resolved is finally starting.

The meeting must devise a sweeping solution that will enable eurozone countries to regain market confidence.

A summit meeting of European Union members, including 17 eurozone states such as Germany and France, will be held Thursday and Friday in Belgium.

The European Central Bank is also to discuss financial policy on Thursday.

The debt crisis has spilled over from Greece with its huge fiscal deficit to Italy, and is now spreading to Spain and France.

This is a serious situation.

Before the summit meeting, Standard & Poor's announced it was considering a possible downgrade on the credit ratings of long-term sovereign bonds issued by 15 eurozone countries, including six states such as Germany and France whose bonds are rated AAA.

In addition, the U.S. rating agency warned it might cut the credit rating of bonds issued by the European Financial Stability Facility (EFSF), which are guaranteed with the creditworthiness of the six states' bonds.
The agency's announcement appears to illustrate its distrust of the reactions by the political sector, which have always been one step behind.


Fiscal rehabilitation needed

Leaders of EU countries should take this seriously as a warning from the market.

If the summit meeting comes out with half-baked measures to deal with the debt crisis, S&P will go through with the downgrades.

This would aggravate the turmoil in financial markets and undermine the functions of the EFSF, which is supporting countries already in trouble from the debt crisis.

We must watch out for the negative chain reactions that could cause.

A focus of the summit meeting is whether the participating countries can agree on a fiscal rehabilitation plan to stabilize the euro.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have agreed on a plan to impose automatic sanctions against countries that exceed a fiscal deficit limit of 3 percent of their gross domestic product.
They will jointly propose revising the EU treaty at the summit meeting to bring this about.

It is a matter of course to stop free spending policies and enhance fiscal discipline.

We expect the eurozone countries to hammer out a clear policy based on the proposal by Germany and France toward the introduction of mutual surveillance of fiscal policies, which have never been coordinated among these countries.


Stop spread of crisis

What is needed most are emergency measures to prevent the crisis from spreading any further.

The eurozone countries decided at the end of October to expand the EFSF, reduce Greece's debts and strengthen the core capital of banks, but none of them has been carried out yet.

If these measures are not implemented immediately, they may come too late.

In relation to these measures, the role of the ECB will become more important.

In early November, immediately after its new President Mario Draghi, an Italian, assumed office, the bank cut its benchmark interest rate to 1.25 percent for the first time in 2-1/2 years.

However, there are fears the European economy might slow down and register negative growth if the countries introduce austerity measures.

The ECB would win praise if it considers an additional interest rate cut to support the economy.

If the ECB buys up a large number of bonds from Italy and other countries, it will also be an effective measure to prevent the yields of government bonds from soaring and to soothe credit uneasiness in the market.

The rest of the world is watching whether European countries can stand together and act quickly to deal with this crisis.

(From The Yomiuri Shimbun, Dec. 8, 2011)
(2011年12月8日01時30分 読売新聞)

by kiyoshimat | 2011-12-10 02:42 | 英字新聞

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