« 豊胸バストアップの効果で迷える世界の男どもを | トップページ | 米・ミャンマー―対話を民主化にいかせ »

2011年12月 3日 (土)


--The Asahi Shimbun, Dec. 2
EDITORIAL: Drastic financial easing needed to solve Europe debt crisis

The central banks of Japan, the United States, Canada and Europe jointly proposed measures to deal with the ongoing financial crisis.

They will lower interest rates on their U.S. dollar loans to make it easier for banks facing financial difficulties because of the European debt crisis to borrow funds.

In stock markets across the world, share prices rose on the grounds that concerns for a financial system crisis were alleviated.

However, the dollar supply plan is no more than a stopgap measure.

The European debt crisis that spread to Italy has become increasingly serious with concerns for the downgrading of French government bonds and the failure of a German government bond auction to draw investors.

With the drop in bond prices, European banks are facing deteriorating financial standings, and pressure of a credit crunch caused by cutbacks in lending and sales of assets shows no signs of abating.

The Organization for Economic Cooperation and Development predicts that the economy of the euro zone will shrink for two consecutive quarters from the October-December period of 2011.

The debt crisis is undermining financial functions and cooling the real economy.

At this rate, the situation could lead to a global economic crisis, affecting the United States, which has a huge amount of investments and loans in Europe, China, with its large quantities of exports to Europe, and Japan, which has been hit by a strong yen.

A recurrence of the Lehman Shock must be averted at any cost.

However, major European countries that are the key players in the euro zone have yet to make a concerted effort to deal with the crisis.

The expansion of the European Financial Stability Facility (EFSF), which is considered an ace in the hole for now, has a far way to go to meet its target of 1 trillion euros in the face of objections by Germany, which puts importance on financial discipline of each country.

While it is important to restore fiscal health, the European Central Bank (ECB) should first expand its purchase of government bonds.

It is also necessary to drastically reduce interest rates and implement drastic financial easing.

We urge Germany, which is objecting to the purchase of government bonds on the grounds that it would cause inflation, to change its stance on this matter.

A credit crunch would sooner or later develop into massive pressure for deflation.

Unless unrest of financial systems is brought under control, the situation could lead to a deflationary spiral beyond help.

Currently, the growth rate of prices in the euro zone is 3 percent.

Since it is higher than the ECB's target of "2 percent or less," the situation calls for austerity measures under ordinary circumstances.

But now is a time of emergency.

While Germany bitterly remembers the hyperinflation that hit the country after World War I, if the current situation leads to a deflationary spiral, it would be a total loss.

Furthermore, as France proposed, the EFSF should be reorganized into a bank.

Like ordinary banks, if it borrows funds from the ECB by using government bonds in its possession as collateral and purchases more bonds, the expansion of the EFSF would be unnecessary.

Although the idea was scrapped because of Germany's opposition, top priority must be given to the prevention of a crisis.


« 豊胸バストアップの効果で迷える世界の男どもを | トップページ | 米・ミャンマー―対話を民主化にいかせ »





« 豊胸バストアップの効果で迷える世界の男どもを | トップページ | 米・ミャンマー―対話を民主化にいかせ »