Sun, Oct 09, 2011 - Page 8 News List

[ LETTERS ]

Eurozone crisis

I wish to comment on a recent article in the Taipei Times on the eurozone crisis (“Perng offers suggestions for handling eurozone crisis,” Oct. 6, page 11).

While I do agree that the eurozone urgently needs a common economic government to handle the crisis, let us not forget that the present eurozone crisis is more than just a sovereign debt crisis. It is also a currency crisis and a banking crisis, the complexity of which has bred confusion and has political consequences.

The EU’s various member states have formed widely different views and their policies reflect these rather than their true national interests. The clash of perceptions carries the seeds of serious political conflicts.

Given differences in economic growth and development, politics, banking systems, public debt management and so on, the euro was an incomplete currency to begin with. The Maastricht Treaty of 1992 established a monetary union without a political union. The euro boasted a common central bank without a common treasury so that when it comes to sovereign credit, each member country is on its own. It was exactly this lack of sovereign backing that was missing and obscured until the European Central Bank’s recent willingness to accept member state’s sovereign debts as riskless and on equal terms at its discount window. That is why the euro has become the focal point of the current crisis.

The European banking system has not been properly cleansed since the 2008 financial crisis. Bad assets have not been marked to market, but are being held to maturity. When markets started to doubt the creditworthiness of sovereign debt, it was really the solvency of the banking system that was being questioned, since they were loaded with the bonds of the weaker countries that are now selling below par.

The fact that the Maastricht Treaty criteria were so massively violated shows that the euro has deficiencies that need to be corrected.

What is most urgently needed now is a political union that will form a coalition government for the entire EU. The question is how and which political party or parties within the EU are prepared to form a coalition government. However, with each political entity in the respective member countries holding different political views instead of prioritizing national interest, it seems that there is still a long way to go before an EU coalition government can be formed.

Andrew Michael Teo

Singapore

Nuclear power fallout

It is indeed socially significant and environmentally justifiable for tens of thousands of Japanese to march in central Tokyo to call on Japan’s government to abandon atomic energy in the wake of the Fukushima Dai-ichi Nuclear Power Plant disaster (“Japanese protest nuclear power,” Sept. 20, page 1).

Over recent decades, nuclear power has been regarded by many as an efficient way to generate energy and many countries have built nuclear reactors for this very reason. However, why have people in Japan now protested violently against nuclear power?

The answer is because if a nuclear crisis is to arise, it would cause the extinction of all creatures. We should learn a lesson from modern history.

The worst nuclear accident was the Chernobyl disaster on April 26, 1986, which caused mass evacuations, long-term health problems and agricultural and economic distress. It was a disaster that affected not just the Ukraine and Russia, but the whole world. A large amount of radioactive material was released into the atmosphere. There are many reports concerning the number of people that have suffered from various illnesses because of exposure to nuclear radiation. Now, more than 20 years later, many areas around Chernobyl are still uninhabitable.

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