Prague, 19 October 2000 (RFE/RL) -- A new record low in value for the European Union's common currency, the euro, together with a further slide in prices on the U.S. and other stock markets, plus uncertainties produced by the Mideast crisis -- all these economic problems evoke comment in the Western press today.
Following the renewed fall of the euro yesterday, Britain's Financial Times says in an editorial that the European Central Bank, or ECB, finds itself in a mess of its own creation. Its editorial says that the ECB is learning "slowly and painfully that the 17 members of its governing council should either speak with the same voice about monetary policy or keep quiet. So," it adds, "[ECB President] Wim Duisenberg's candor about currency intervention in an interview this week was extraordinary."
"What matters now," the paper says, "is that the ECB does not compound the error with a grand gesture aimed at restoring its credibility. A decision to raise interest rates would be a mistake and would do nothing to rebuild confidence in the markets."
The editorial allows that Duisenberg could claim he was only stating the obvious in his press interview, namely: "that that the U.S. presidential election had affected the timing of the international effort to raise the euro's value. And," it goes on, "his admission that intervention was unlikely if currency volatility were generated by a war in the Middle East would have surprised few." But in the game of what the editorial calls "spooking currency speculators, central bankers [it says] should never reveal their hands, particularly if they are empty."
After his latest slip, questions have arisen about Duisenberg's job security. But the dangers of forcing him to resign are pointed out both in the Financial Times and in a commentary in Germany's Die Welt.
In Die Welt, Joerg Eigendorf writes: "Whoever at the present moment demands the resignation of the ECB president is igniting a gunpowder barrel. Duisenberg is after all not a finance or economics minister who can be interchanged at will. Much more depends on him as a figure," Eigendorf argues. "Whoever allows Duisenberg to be shot down would undermine the independence of the central bank." He cites Klaus Friedrich, the chief economist at Dresdner Bank, as warning: "The resignation of Duisenberg would represent an enormous blow for Europe and the euro."
WALL STREET JOURNAL EUROPE:
An editorial in the Wall Street Journal Europe urges that EU politicians should give Duisenberg and the ECB more support. It says: "The European Commission and the national governments have a role to play -- trimming regulations, promoting privatization, and slashing taxes. These liberalizations unleash economic growth potential and reduce inflationary pressures."
The editorial goes on: "Mr. Duisenberg perhaps needs to be more discreet. But he also needs cooperation from his partners at the European Commission and among the [EU's] member states, whose job it is to adopt pro-growth economic policies. The euro will strengthen when it is in greater demand."
An editorial in the Spanish daily El Mundo worries about the broader implications of the euro's tumble and the accompanying strength of the U.S. dollar. It says: "The rise of the dollar, together with the rise of the price of crude oil, has clear inflationary consequences on European economies and could lead to a new rise of the price of [borrowing] money." The paper adds: "The impression that everything was going well until today is now shown to be wrong. The question is: Are we facing a simple [economic] readjustment or [instead] a change of [the entire] cycle? Nobody today is able to give an answer to that."
INTERNATIONAL HERALD TRIBUNE:
In a news analysis in the International Herald Tribune, Tom Buerkle ponders the same point. Under a heading "Investors' Fear of Heights Causes Markets to Swoon," he writes: "The recent slide in global stock markets nearly turned into a rout Wednesday (Oct 18) as several disappointing earnings announcements and a rise in U.S. inflation combined to send stock prices tumbling."
Assessing what the stock market drop means, Buerkle writes: "The initial declines seemed to reflect a fundamental shift in investor psychology. Each new piece of negative news in recent weeks has undermined many of the optimistic assumptions about technology-driven growth, [according to] analysts and fund managers." He continues: "For most analysts, though, the drop in global stock markets remains mostly a correction of previous sky-high valuations. The risk is that it could turn into something worse if it undermines business and consumer confidence."
A Washington Post commentary by analyst Robert Samuelson, carried today in the International Herald Tribune, also notes the nervousness of the stock markets, particularly in relation to the price of oil and the possible use of oil as a political lever. Samuelson writes: "The violence in and on the edges of Israel, however it turns out, has provided a sobering tutorial in the vulnerabilities of the global economy. The enthusiasm for 'globalization' overlooked the disturbing possibility that nationalism, religious hatreds and old-fashioned regional rivalries could disrupt world trade and investment. But this is obviously so."
He goes on: "Geopolitics and global economics are colliding in ways that we resist contemplating because the possible consequences are too upsetting and confusing. Oil is the largest flash point but not the only one. This is globalization's dark side."
Samuelson writes that globalization presumes that materialism refashions world politics, and that countries that trade and invest together accommodate political differences. "These arguments make some sense," he contends, "but only up to a point. They also rationalize wishful thinking by ignoring the potential for chaos, which may force governments to do things that they would ordinarily reject."
WALL STREET JOURNAL EUROPE:
The political situation in the Middle East continues to draw strongly partisan commentaries today. Writing in the Wall Street Journal Europe, Daniel Johnson says: "One of the most troubling aspects of the present Middle East crisis is the unquestioning support offered to the Palestinians by the Europeans. At the United Nations," He says, "Britain and France back a resolution that blames Israel for the collapse of the peace process. French President Jacques Chirac indulges his penchant for grandstanding by torpedoing the Paris summit between Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat with his last-minute proposal for an international commission of inquiry into the violence."
Johnson continues in the same vein: "The British and French foreign ministers, Robin Cook and Hubert Vedrine, strut across the Middle Eastern stage, putting the Palestinian case. The European Union pours hundreds of millions into Mr. Arafat's coffers, without any tangible gain to anybody except the chairman and his cronies."
LOS ANGELES TIMES:
At the other end of the spectrum is a commentary in the Los Angeles Times by Hussein Ibish that says: "The explosion of anger that has rocked the cities of the Israeli-occupied Palestinian territories was predictable and inevitable. The latest 'cease-fire' agreement -- as if this has been a conflict between two armies -- is unlikely to produce anything more than a temporary lull in the protests." Ibish sums up: "The Israeli occupation of East Jerusalem, the West Bank and Gaza is the violent context that makes such protests inevitable. There is, in the final analysis, only one way to 'stop the violence,' and that is to end the occupation."
(RFE/RL's Aurora Gallego contributed to this report)