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Western Press Review: Introduction Of European Single Currency

By Grant Podelco/Daisy Sindelar/Dora Slaba

Prague, 2 January 2002 (RFE/RL) -- Commentary in the Western press today focuses heavily on the introduction of the new euro banknotes and coins. Today is the first normal business day in which the coins and notes will be used by the 300 million people in the 12 European Union countries that have abandoned their national money and adopted the new currency.

Other analysis today looks at the increasing tensions between India and Pakistan, the economic crisis in Argentina, and the possibility of trying suspected Al-Qaeda terrorists in U.S. military tribunals.


In today's "Financial Times," columnist Martin Wolf calls the introduction of the euro a historic moment, but asks, "What further changes might it herald?"

If an aim of the euro is to generate the shared identities from which further integration can grow, the public must associate the new money with prosperity, Wolf says. Many believed the euro would be a strong currency, but it has, so far, been a weak one. Many also thought the size of the euro-zone would allow it to weather adverse shocks, yet it has been battered by the global slowdown.

But it would be wrong, he says, to notice only the drawbacks of the union. "The lead-up to yesterday's launch of notes and coins has also seen important gains, particularly in lower inflation and fiscal consolidation. A startling indication of this transformation is that Germany's fiscal deficit of about 2.5 percent of gross domestic product is expected to be the biggest in the European Union."

In assessing the vigor of the euro-zone economy, Wolf concludes that it is neither a startling success nor a massive failure. The launch of the euro "has neither transformed the eurozone economy nor turned it into an autonomous global pole of growth. But it has been associated with a number of marked improvements in macro-economic and structural policies."

What sort of catalyst for further change is the euro likely to prove? Wolf says the euro-zone will not disintegrate, nor will it succeed dramatically. "The likelihood is of modest trend growth and excessive unemployment, with the more youthful and innovative U.S. outperforming in the long term," he concludes. "Yet the launch of notes and coins will accelerate steps in a federal direction. For the British, painful decisions are at hand, not just on entry into the eurozone, but on the future of the EU itself."


Jurgen Jeske, writing in Germany's "Frankfurter Allgemeine Zeitung," says that more than earlier steps toward integration -- discontinued border checks and the launch of a single European market -- yesterday's introduction of euro bills and coins "will contribute [to] a European feeling of community."

He continues: "The euro's significance extends from the outset well beyond the eurozone. In the central European countries that will soon be joining the European Union, the euro will be a kind of parallel currency. In the rest of Eastern Europe the euro will probably acquire a greater significance that the [German] mark ever enjoyed."

And for Germans, he adds, the common currency "sets the seal on Europe's integration of the reunited and politically sovereign Germany."

That is all very well, Jeske says, but much work remains to ensure the success of the euro. Without progress toward accompanying political union, the euro will continue to suffer a lack of credibility on financial markets.

He writes: "The history of European integration may show that progress toward political objectives has always been made via the economy, but EU member countries have thus far had trouble agreeing on further political integration."

Without a sound political base, he concludes, "monetary union will continue to be endangered."


Columnist Hugo Young, writing in Britain's "The Guardian," says the euro has finally gone from being an "economic presence" to a "political fact" -- one, moreover, that 300 million people will have to assume "will never go away."

So when will Britain follow suit and join the euro-zone? With British skepticism slowly evolving into acceptance, Young says the switch is inevitable. But two key tasks remain. One is to ensure that the euro is both politically and financially credible for Britons. The second is "to consider and refine the larger political structure within which all this can happen to the best advantage of the member-nations" -- preferably by 2004, he says, when the first wave of European Union expansion is expected to take place.

Young says Britain will only hurt itself by delaying a switch to the euro currency. He writes: "The strongest voice in the future political project [of the EU] will never be allowed to the country that continues to reject today's resounding political fact. The only way to shape Europe is to join those who had the courage to put the fact on the ground." Otherwise, he concludes, Britain "will be left out. For nurturing a public delusion that this is only about jobs and money, we will deserve to be. And Europe will not be our Europe."


An editorial in today's "Financial Times" calls the euro a "triumph of political will over practical objections. Its physical launch is a testament to a generation of visionary leaders who pursued a dream, often against the grain of public opinion."

The paper says the reputations of Helmut Kohl, the former German chancellor, and Francois Mitterrand, the former French president, have faded. "But their achievement, together with that of Jacques Delors, the former European Commission president, who masterminded the project, is beyond dispute."

But it says economic and monetary union is far from complete. For example, the monetary policy-making structure of the European Central Bank will have to be remodeled to cope with additional members. An independent monetary policy committee that consults national central bank governors in the euro-zone would probably be best, the paper argues.

Membership of the euro also is incomplete, with Sweden, Denmark, and Britain so far abstaining. The political case for membership must be made and the argument won.

European integration has for the past 40 years been driven by elites, the paper posits, but the project now lies in everyone's pockets. "The arrival of the currency will not necessarily fuel new enthusiasm for closer 'political union.' But the EU as a whole will be judged on the currency's success or failure."

The euro, the editorial concludes, "is not merely an instrument for monetary transactions: it is also a symbol of Europe's common purpose. [The] new currency is now as irrevocable as any human invention of this kind can be. It now must be a success. There is no sane alternative."


In "The New York Times," columnist Thomas L. Friedman praises U.S. President George W. Bush's handling of the war in Afghanistan, saying he has shown "steely resolve, imagination, leadership and creativity." But Friedman says he wishes Al Gore, Bush's main challenger in the 2000 presidential election, were president.

"Instead of showing resolve, imagination, leadership and creativity on the domestic front," Friedman says, "Bush has done just the opposite. He has tried to use the tremendous upsurge in patriotism, bipartisanship and volunteerism triggered by the tragedy of September 11 to drive a narrow, right-wing agenda from September 10 into a September 12 world."

Friedman says a priority should be to use the power of 11 September to make the U.S. stronger, safer, and a better global citizen, beginning with how America's uses energy. "But so far, all that's happening is that we've made the world safer for Saudi Arabia and [the Organization of the Petroleum Exporting Countries] to raise oil prices again," Friedman writes.

Friedman urges Bush to launch a program for energy independence based on developing renewable resources, domestic production, and energy efficiency. It would also be Bush's best response to foreigners enraged by America's refusal to join the Kyoto treaty to stop global warming. "Mr. Bush could say that by weaning America away from oil gluttony he would be doing more for the environment than Kyoto ever would," Friedman writes.

Ultimately, U.S. presidential greatness is measured by what happens at home. "If this war on terrorism ends with nation-building only in Afghanistan and not in America," Friedman concludes, "it will be no victory at all."


In an analysis in today's "International Herald Tribune," Najam Sethi -- who is the editor of "The Friday Times," a national weekly based in Lahore, Pakistan -- criticizes India's attempts to pressure Pakistan President Pervez Musharraf to stamp out pro-Kashmir groups in Pakistan.

First, Sethi says, no Pakistani ruler could survive the backlash from the public and the military if he were perceived to have "betrayed" the cause of Kashmir. Secondly, Musharraf has already risked much by alienating powerful religious forces in Pakistan after aligning with the West over Afghanistan.

Third, by sending half a million men under arms to the Pakistani border, India has forced Pakistan to thin its 200,000 strong paramilitary force plugging the Afghan border. This means that Al-Qaeda terrorists will find it easier to sneak into Pakistan and hide.

Fourth, Musharraf has reiterated his resolve to root out religious extremism in Pakistan. "A month ago," Sethi writes, "he froze the assets of several terrorist groups and arrested the top five leaders of the anti-America and pro-Kashmir Jihadi parties in the country. Now he has detained leaders of the two militant organizations named by India and the United States as responsible for the terrorist attack on the Indian Parliament on December 13, even though neither country has provided evidence of its claims....What more could New Delhi or Washington have asked for and got immediately?"

Finally, Sethi writes, Pakistan is not as defenseless as Afghanistan nor as helpless as the Palestinians against Israel. "The Pakistani army has given as good as it has ever got from India," he says.

Musharraf and Indian Prime Minister Atal Bihari Vajpayee are scheduled to attend the meeting of the South Asia Association for Regional Cooperation in Nepal on 4 January. India should use the occasion to start talking peace with Pakistan.

"India's political aims in Kashmir may be better served by patiently strengthening Musharraf's hand in his fight against all forms of religious extremism than by foolishly pushing him to the wall," Sethi concludes.


In a commentary in "Die Welt," Hilmar Koenig notes a ray of hope for easing rising tensions between India and Pakistan.

Koenig writes: "There's a slight breath of detente blowing at the beginning of the New Year." Many newspapers are now reasoning that, after all, Kashmir will not serve as an incentive for a worse-case scenario of war between the two nuclear powers.

Top politicians in both countries are beginning to react to international diplomatic pressure. Vajpayee and Musharraf are both due to attend a summit of regional leaders on 4 January in Nepal, although a face-to-face meeting is uncertain at this point.

The Pakistani general, Koenig says, has taken concrete measures against terrorists groups that are threatening India. In return, the Indian prime minister took a moderate stance toward Pakistan in his New Year's address.

Such steps, says Koenig, do not amount to much. But those who experienced the war hysteria over Christmas are "sighing with relief" and are grateful for this slight indication that reason might prevail.


In "The New York Times," columnist Paul Krugman says that hardly anyone in the U.S. seems to care about the economic crisis in Argentina, but they should. "The catastrophic failure of [Argentina's economic] policies is first and foremost a disaster for Argentines," Krugman says, "but it is also a disaster for U.S. foreign policy."

Argentina, he writes, bought into the promises of U.S.-promoted "neoliberalism." Tariffs were slashed, state enterprises were privatized, multinational corporations were welcomed, and the peso was pegged to the dollar. "Wall Street cheered, and money poured in," Krugman says. "For a while, free-market economics seemed vindicated."

Then things began to fall apart, and now the country is in "utter chaos." Latin Americans, he writes, do not regard the U.S. as an innocent bystander. Yes, Krugman says, Argentina's slump had more to do with monetary policy than with free markets. "But Argentines, understandably, can't be bothered with such fine distinctions," Krugman says, "especially because Wall Street and Washington told them that free markets and hard money were inseparable."

Krugman says the best hope for an Argentine turnaround is an orderly devaluation, in which the government reduces the dollar value of the peso and at the same time converts many dollar debts into pesos. But that now seems a remote prospect.

Instead, Argentina will probably turn back the clock. It will impose exchange controls and import quotas, turning its back on world markets. Krugman predicts these "retrograde policies" will work, temporarily. But ignoring the world market is bad for long-run growth, he says.

In April, U.S. President George W. Bush touted the proposed Free Trade Area of the Americas as a major foreign policy goal, one that would "build an age of prosperity in a hemisphere of liberty." If that goal really was important, the U.S. has just suffered a major setback, Krugman concludes.


Finally, two pieces look at the possibility of using U.S. military tribunals to try Al-Qaeda members accused of complicity in the 11 September terrorist attacks on New York and Washington. In a comment in "The Washington Post," Democratic Senator Joseph Lieberman writes that the plan's critics, who argue such trials violate civil liberties and rights, are somewhat -- though not entirely -- misguided.

"Military tribunals are a legitimate and accepted forum in which to accord alleged war criminals fair and impartial trials," he writes. "They are not nor should they become an avenue in which to mete out second-class justice to any foreign national the government desires to detain. Yet no one can be blamed for reading [President George W. Bush's] November 13 order [authorizing military trials] as allowing for just that."

Lieberman elaborates: "The order did not clearly limit its application to those accused of war crimes, leaving open the possibility that the administration wrongly sought to extend military jurisdiction beyond its settled limits. The order left unstated whether a presumption of innocence would apply and what rights defendants would have to know the charges and evidence against them and to see their families or attorneys. Elemental aspects of due process -- such as the requirement that suspects not be held indefinitely without trial -- went unmentioned, as did any statement about whether proceedings would be open to the public."

The U.S. administration's decision to charge Zacarias Moussaoui -- the first person to be indicted in connection with the 11 September attacks -- in a federal district court rather than a military tribunal only complicates matters, Lieberman says. The case of Moussaoui, who is scheduled to be arraigned today in Virginia, "only makes it harder to convince the American people and the world of the fairness of our military tribunals."


The second piece, published in "The Wall Street Journal Europe," is by Lloyd Cutler, a lawyer who participated in the 1942 U.S. sabotage trial of eight German citizens now being cited as the leading precedent for Bush's authorization of a military tribunal for Al-Qaeda members.

Cutler says that military tribunals are more than capable of meeting fair-trial standards. He writes that if Osama bin Laden or other people presumed to be behind 11 September "were tried, convicted and sentenced to death by a military court that observed the constitutional fair trial rights of all criminal defendants under the case law as it stands today, the Supreme Court would not upset the conviction."

Still, Cutler urges caution. He writes: "The 1942 trial" -- which resulted in death sentences for all eight defendants, although two were later commuted -- "was conducted in secret and the defendants were not adequately represented by separate counsel of their choice. A military trial of Al-Qaeda leaders in 2002 would have to be held in the full glare of modern journalism." Although he says this can be done in a way that meets all constitutional and public concerns, "success will depend on the quality of the judges, the prosecutors and the defense lawyers, and their ability to show the world that justice is in fact being done."