EDITORIAL: EU rescuing Greece

A catastrophe is forecast, but it occurs nevertheless with no one able to prevent it.

This is a classical Greek tragedy, and events in modern Greece transpired in just such a manner as the country fell into a fiscal crisis. The European Union, seeking to avoid falling into its own "predicted catastrophe," has taken action to help Greece.

Greece is one of the 16 eurozone countries. Neglecting the problem would discredit the euro and could push other EU countries with pent-up fiscal deficits to the brink of crisis.

Leaders of the EU member states decided that the eurozone should work together with the International Monetary Fund and lend funds to Greece when necessary. Greece will strive toward reducing its debts, and the EU and the IMF will oversee those endeavors.

Until this agreement, the EU was split by fierce debate.

France and other countries argued that since eurozone members share even a common financial policy, it is only natural that the eurozone should support a member state.

But Germany and other countries argued that it is up to each member to maintain fiscal discipline, and that they should not help a country that ruined itself through slipshod management.

In the end, they agreed to ask the IMF to oversee Greece's attempts to reduce its debts. For people who consider the eurozone as "one single country," its reliance on an outside force must be a bitter pill to swallow.

However, although the EU may be integrated economically, not everyone shares the same level of commitment and solidarity as a citizen of Europe. No doubt it was necessary to bring in an international organization such as the IMF to bridge that gap.

Yet even with the plan set for its assistance, the euro continues to face trials and tribulations. Market apprehension toward Greece, which will be forced to pay back huge government bonds, has not abated. To reduce its national debt, Greece must implement painful reforms.

The euro is a "currency without a government" and lacks any firm fiscal base with which to support itself. To avoid a recurrence of the crisis despite such limitations, the EU, in watching over the finances of its member states, must have stronger powers and the ability to check any wasteful finances.

The debate over whether to create a European Monetary Fund, the European version of the IMF, bears attention.

The euro has become a major currency on par with the dollar, and is the greatest accomplishment of the ever-evolving European Union. But the crisis has pushed into the limelight the structural problem of the EU, namely that integration of its politics has not been in tandem with the integration of its economies.

The EU members should not merely stand transfixed as they are, but turn this crisis into an opportunity to evolve the euro.

Avoiding a fiscal crisis is not just a Greek matter or a European matter. In Asia, too, there is now momentum to create a crisis-prevention mechanism, using its own experiences during the global financial crisis. The EU experience would be informative.

Japan is another country with a huge national debt and is in close proximity to the next "forecast catastrophe." We should take a moment to remind ourselves of that.

--The Asahi Shimbun, March 29