Prague 30 December 1998 (RFE/RL) -- In less than 48 hours, the European Union will launch its ambitious project of a single currency, the euro. Western press commentators assess the new money's prospects and its likely effects on the rest of the world. There is also continuing commentary on two familiar trouble spots, Kosovo and Iraq, and on Russia's economic and political problems.
IRISH TIMES: Euro's Birth Is Historic
Ireland is one of the 11 EU members joining the euro Friday, and the Irish Times today calls the euro's birth "an historic moment." The paper adds that Dublin's "decision to join is arguably the most significant economic policy decision taken by any Irish government. Once we enter the single currency, there can be no going back. The changes which the euro will bring will be far-reaching, if not entirely predictable."
The IT's editorial continues: "The immediate impact on consumers will be limited. Euro notes and coins will not become available until January 2002 and, until then, most people will continue to use [Irish] pounds for the bulk of their transactions. However...in some areas the change will be immediate; from next Monday share prices on the Irish Stock Exchange will be quoted only in euros."
The paper adds: "The longer-term impacts of the switch are more difficult to predict....The single currency will, inevitably, bring with it pressures for further economic and political changes in the years ahead, posing new challenges for Europe's policy-makers at a time when they are also planning to enlarge the union. The great experiment will start tomorrow at midnight, but its full implications will take years to emerge."
WALL STREET JOURNAL EUROPE: Euro's Impact Will Be Anything But Modest
The Wall Street Journal Europe urges, "Say 'Allo' to the Euro." The paper writes: "The advent of the euro arguably will be the most ambitious monetary experiment since the launching of the Bretton Woods system at the end of World War Two."
The euro's "effects on Europe and the world financial order," the paper continues, "will be anything but modest...[For example,] Ireland, a country of 3.7 million, will be like Los Angeles and Boston, integrated into a single economy. That mega-economy will comprise 290 million people, more than in the U.S. and comparable to its share of world trade."
But, the WSJ cautions, "all this is predicated on the ability of Europeans to make the single currency work for them. And even if it does, there's nothing in the euro's user kit that explains how it will halve 10 percent unemployment rates, produce a 3.5 percent annual GDP [gross domestic product] growth or create a European Microsoft."
On the same editorial page today, the WSJ Europe carries a commentary on the euro by Hans Tietmeyer, President of Germany's Bundesbank. He writes: "The euro will provide Europe and Europeans with new opportunities. [Currency] transaction costs will be reduced, and exchange risks among EMU [EU Economic and Monetary Union] countries will disappear. Enterprises will have a more reliable basis for taking decisions about investment and trade. Within the euro area, it will become easier to compare prices..."
"However," Tietmeyer adds, "one must be wary of expecting too much from EMU. Monetary union cannot solve structural problems or compensate for undesirable developments that have their origin elsewhere. Economic growth and employment cannot be stimulated, either, by [monetary policies] that politicians occasionally demand."
The commentary concludes: "There is therefore no way round radical reforms --from tax and social security policies to wage and labor market policies-- if [the] EMU countries want to improve employment prospects on a lasting basis....Every euro country must carry out the necessary reforms itself. Monetary union will not change anything there."
JOURNAL OF COMMERCE: EU Should Increase Trade With Poorer Nations
In the U.S. daily Journal of Commerce yesterday, correspondent Bruce Bernard said in a commentary: "Europe's richest and poorest nations share a common problem. It's called the European Union."
Writing from London, Barnard explained: "EU membership has become the most important foreign-policy issue facing Western and Eastern [European] outsiders. Switzerland and Norway [two rich non-EU countries] will be even more isolated after the EU adopts the single currency...transforming itself into a genuine economic superpower. And Bulgaria, Romania and several other former communist states will feel even more alienated from the European mainstream as the EU gets down to the nitty-gritty of accession negotiations next year with Poland, the Czech Republic, Hungary, Slovenia and Estonia..."
The commentary continued: "The rich and the poor take diametrically opposite views of EU membership. In Switzerland and Norway, the pro-EU camp regards joining as a necessary evil....In the former communist nations, by contrast, the overwhelming majority of voters regard EU membership as a passport to economic prosperity and a guarantor of their fragile democracy."
He concluded: "The EU should let its spoiled, rich neighbors sort out the contradictions of membership on their own and concentrate on boosting trade with the more vulnerable nations to its east. Democracy has taken root in the lucky five negotiating entry terms, but remains fragile elsewhere in the region, sustained in difficult times by the hope of eventually joining the rich man's club to the west. If that goal starts to look unattainable, there could be disastrous consequences."
AKTUELT: Denmark Must Enter EMU
In Denmark, one of the four EU member-states that have decided not to join the euro for the time being, the daily Aktuelt today urges that Copenhagen enter EMU as soon as possible. In an editorial the papers says: "[With the launch of the euro,] both the EU and Denmark are breaking from their common history. Eleven EU states are dispensing with one of the most sensitive symbols of their sovereignty, while Denmark [is losing some of its influence in EU decision-making. This occurs] at a time when Copenhagen has played an important role in foreign-policy initiatives such as...the OSCE and peace-keeping."
The editorial continues: "By its own volition, Denmark will now passively sit on the sidelines, without practical economic advantages [the result of its decision not to join EMU]." The paper concludes: "Unlike other EU countries, Denmark has taken EMU so seriously that it decided to put it to the test of a referendum. The time [has now come] to speed up the holding of the referendum, and to consider carefully whether our 'principled' sovereignty [the stated reason for Denmark's not joining the euro] really has any practical benefits."
FULDAER ZEITUNG: No Easy Way To Escape From Kosovo Problem
The recent violence in Kosovo is the subject of an editorial in the Fuldaer Zeitung, a German provincial daily. The paper says: "Everybody is now waiting for a new bloody war in Kosovo next year. How can one manage this crisis?" the editorial asks. "Will it be a long-lasting Western intervention with some 40,000 to 60,000 soldiers, which is not now acceptable to many nations, or will the West play for time, hoping to find some Kosovo-Albanian leader capable of a compromise solution?"
"If [the second option] turns out to be the strategy," the editorial adds, "then responsible Western leaders will be running the risk of a genocide. There is truly no easy way to escape from the Kosovo problem," it concludes.
AKTUELT: OSCE Faces Its Most Serious Crisis So Far
Political commentator Per Jonsson writes in the Danish daily Aktuelt: "The OSCE monitors in Kosovo have become the hostages of a cease-fire agreement that applies to just one of the warring parties. Thus the OSCE has been plunged into its most serious crisis [so far]."
The commentary continues: "The fact that the unarmed observers, only 600 of whom are actually in place in Kosovo, have already been threatened with violence, demonstrates the superficiality of the [U.S.-brokered} cease-fire. One problem is that the cease-fire applies to the OSCE and the Yugoslav Government. These are not the correct signatories [to such an agreement], since the hostilities are in fact conducted by the Yugoslav army and the Kosovo Liberation Army (UCK)."
Jonsson concludes: "Under the agreement, the Yugoslav Government should protect the OSCE monitors. This is also wrong-headed, as it means that the monitors cannot do their jobs in case it is the Yugoslav army that breaks the cease-fire."
WASHINGTON POST: Saddam Is In A Defiant Mood
Iraq's shooting at U.S. military aircraft enforcing a no-fly zone in the north earlier this week evokes this comment from the Washington Post today: "[The] military action seems mostly a gesture by which Saddam Hussein means to show he is still capable of at least a symbolic defense of Iraqi sovereignty after undergoing four days of American and British bombing just days earlier."
In an editorial the paper goes on to say: "Saddam Hussein appears to be in a particularly defiant mood. He is not only taking larger risks with those of his military forces that rode out the allied airstrikes of December 16 to 19. He is stiffening his repudiation of United Nations disarmament inspectors, excluding UN relief workers and warning that he may cut off the program that allows Iraq to sell 4,000-million dollars worth of oil a year for food and medicine for his struggling civilian population."
The WP adds: "He is inflicting this damage, moreover, at the expense of his standing with countries otherwise inclined to feel Iraq has suffered enough since the 1990-91 Gulf War. These countries include Security Council members Russia and France, and Arab countries as well. Egypt's president, Hosni Mubarak, spoke for them all yesterday when he expressed his helplessness to aid the Iraqi people: "The regime in power [in Baghdad] is the root of all problems."
DAILY TELEGRAPH: Saddam Is Making Little Headway
"Saddam Flails," says Britain's Daily Telegraph. The paper argues that "the firing on allied aircraft confirms that Saddam Hussein is a threat to regional stability and his own people. It thus strengthens the British and American contention that the way to deal with his defiance of UN resolutions is not to seek a compromise but to use armed force."
The DT goes on: "Britain and the U.S. may still have to contend with opposition to the military action they took before Christmas. But their opponent is making little headway toward convincing Arab nations that they should break the economic sanctions imposed on Iraq after the Gulf War. And his threats to shoot down allied aircraft... are best regarded as an attempt to convince his armed forces that he is cutting free of international restrictions."
It sums up: "Thanks to British and American determination, [Saddam] remains formidably constrained."
THE GUARDIAN: UN Faces An Impossible Task
A different point of view is expressed in the Guardian today, which says that the "bombing of Iraq...has shattered the established policies of the U.S. and Iraq. America's policy of containment through [UN] inspection," the paper writes further, "lies in ruins. Iraq's policy of breaking out of sanctions through cooperation and concealment is a thing of the past."
The Guardian goes on: "Iraq's Arab neighbors do not want any more trouble. Their reaction to the Iraqi attempt to whip up a regional front against the U.S. has been to postpone the summit that Baghdad had hoped would condemn the U.S. and British."
According to the paper, "the clashes this week underline how little remains of the framework within which America and Iraq pursued their objectives in the past. The incompatibility of those objectives is out in the open, which means that the UN and other would-be mediators have an apparently impossible task before them."
NEW YORK TIMES: Belarus Is The Wrong Partner For Russia
Turning to Russia, the New York Times today warns President Boris Yeltsin that Belarus is the "wrong partner for [Moscow]" The paper writes: "Russia will make a grave mistake if it follows through on plans to reunite with the former Soviet republic of Belarus. The merger scheme announced last week by...Yeltsin and his Belarusian counterpart, Alyaksandr Lukashenka, may never come to pass. No formal agreement was signed and many of Mr. Yeltsin's declarations these days cannot be taken at face value."
The paper continues: "But if the merger does move ahead, it would burden an already depleted Russian economy with the severe economic problems facing Belarus. By taking on responsibility for refloating the Belarusian ruble and for feeding 10 million more people, Moscow would make it that much harder to pay off its own back wages and loans and to re-establish credibility with the International Monetary Fund and other financial institutions."
The NYT also says: "Russia stands as a cautionary example of the hardships created by mishandled economic reforms. But Belarus, a landlocked...country between Poland and Russia, shows that rejecting reforms altogether can lead to even greater problems. Since Mr. Lukashenka came to power in 1994, he has tried to sustain an old-fashioned Soviet-style command economy."
The paper sums up: "No Russian Government interested in building democracy and prosperity should want any kind of partnership with Mr. Lukashenka."
THE GUARDIAN: Russia Lacks Infrastructure Needed For Market Economy
Finally, Britain's Guardian newspaper today also carries an editorial on Moscow's economic problems entitled "Russia in the Red." The paper says: "As the year draws to a close spare a thought for an economy disintegrating before our eyes, yet which is in danger of being forgotten: Russia."
"What went wrong [in Russia]?" asks the editorial. "Why was 'shock therapy' successful in Poland, but not in Russia?" It answers: "With hindsight it is clear that what Russia lacked most of all was the institutional infrastructure to deliver a market economy. There is no point in pumping international money into a banking system if proper banks don't exist. There is no point in privatizing everything if [there are no structures] to run them properly, let alone prevent criminalization."
The Guardian adds: "Arguably, the single biggest structural reform that Russia needs is an efficient system of tax collection....If the Russian Government could only collect its rightful share of taxes, then the vicious circle of financial decline could be averted."