試練の世界経済 欧州危機の収束はまだ途上だ

The Yomiuri Shimbun (Jan. 5, 2013)
Deeper EU integration needed as European crisis drags on
試練の世界経済 欧州危機の収束はまだ途上だ(1月4日付・読売社説)


Europe's protracted fiscal and financial crises appear to have escaped their worst phases, but there is no knowing what lies ahead. Indications are that difficult times for the world economy will most likely continue this year as well.

The European crisis must be overcome by every possible means, to enable the global economy to get on track for a full-fledged recovery.

The World Economic Outlook released last autumn by the International Monetary Fund reduced its world growth forecast for 2013 to 3.6 percent after inflation, and it seems the pace of the recovery in the world economy will remain sluggish.

The biggest factor behind this is that growth in the eurozone will likely be a meager 0.2 percent from the year before, meaning growth will be close to zero. Some observers even say Europe's growth may fall below zero for the second consecutive year.


Break the negative chain

The European crisis, which has lasted for more than three years, has had a harmful influence on the economies of Japan, the United States and other countries, while slowing growth in newly emerging economies, too, as shown by conspicuous declines in China's exports to Europe.

As long as these negative chain reactions continue, there can be no prospects for the world economy to regain its buoyancy.

It was a welcome development that the European Central Bank and the European Union beefed up steps, though belatedly, to contain the crisis from last autumn through the year-end.

The ECB has decided to employ the extraordinary measure of purchasing government bonds of crisis-stricken countries without limitations, in addition to a bold monetary easing policy.

As a permanent safety net for extending assistance to crisis-ridden nations, the European Stabilization Mechanism has been launched. On top of this, an additional bailout package for Greece has also been put in place.

It is highly commendable that Europe's credit unrest has eased and the market has begun to regain stability.


Still many things to do

Optimism that the eurozone crises have ended, however, should not be allowed.

For one thing, Greece has yet to emerge from a serious recession. The path to slashing its government debts as planned is very treacherous.

In Spain, the bursting of a property bubble has caused banks to suffer from a mountain of nonperforming loans, while government finances have kept deteriorating. It is problematic that the Spanish government is still hesitant about whether to officially request assistance from the EU.

As Italian Prime Minister Mario Monti has expressed his intention to step down, a general election scheduled for February may be turbulent.

Under the circumstances, every European country must avoid the folly of easing measures to cope with the crisis. In order not to rekindle the crisis, steady, continuous efforts should be made to rebuild government finances. At the same time, policies should be implemented to place priority on reinvigorating business activities by making the most of the framework for extending assistance to countries in trouble.

Efforts to deepen the integration of the eurozone must continue in order to solve its structural problem of having a single currency but different fiscal policies among member countries.

A policy to unify banking supervision in the region has been decided. However, concrete measures for fiscal integration have been postponed. The key to the issue is what Germany decides.

Within the European economic giant, there is strong opposition to giving further assistance to southern European nations struggling with fiscal crises and fiscal integration.

Germany's general election in autumn this year will be a focal point for whether the eurozone can deepen its integration.


Fiscal cliff avoided

For U.S. President Barack Obama, whose second term in office is to start soon, fiscal rehabilitation and economic revitalization will continue to be weighty pending issues.


Negotiations between Obama and congressional leaders to avoid the fiscal cliff, a term describing the expiration of major tax cuts and large automatic spending cuts, went into the New Year. However, they finally reached an agreement on an extension of tax cuts for middle-class earners and a tax increase for the rich.

Avoiding falling off the cliff brought relief to financial markets. However, there are many issues still pending, such as drastic fiscal rehabilitation measures and an increase in the U.S. debt ceiling--the quota for issuing U.S. government bonds.

As the confrontation between Obama and Congress is still dragging on, there will probably be twists and turns ahead.

The U.S. economy has been on a moderate recovery path with the housing market picking up. However, the unemployment rate is still hovering at a high level of just under 8 percent, and thus it is still difficult to find jobs.

In a rare move, the U.S. Federal Reserve Board has decided to keep interest rates near zero until the jobless rate is stabilized at 6.5 percent or below. We hope the U.S. government and the FRB will strengthen their cooperation to improve employment and realize a powerful U.S. economy.

Expectations are running high for the "shale gas revolution," development of the nontraditional natural gas that has been going on in North America. When shale gas is used on a regular basis, the U.S. manufacturing industry likely will revive, making U.S. industries more competitive.


Stabilizing Japan-China relations

In China, where real economic growth for 2012 is suspected to have gone below the 8 percent target linked to sustaining sufficient employment levels, the pace for economic recovery is slow. Economic growth in China this year is expected to stay around 8 percent.

After the Lehman Brothers shock in autumn 2008, the Chinese government realized a V-shaped recovery leveraged by large-scale economic stimulus measures, serving as a locomotive for the global economy.

However, there are no signs that China will come up with similar large-scale economic measures this time.

A key issue for China is transition from an economy excessively dependent on exports to one led by domestic demand such as individual consumption.

If Japan-China relations get chillier, due to intensification of the confrontation between the two countries over the Senkaku Islands in Okinawa Prefecture, Japanese companies will stop investing in China, an outcome that would also seriously affect the Chinese economy. Chinese leaders must recognize anew the importance of stabilizing bilateral relations.

(From The Yomiuri Shimbun, Jan. 4, 2013)
(2013年1月4日01時20分  読売新聞)

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