OpinionTaking care of business (CNA photos)
The escalating eurozone debt crisis is sending financial shockwaves around the world. Export-reliant economies are bracing for significantly reduced trade numbers over the next 12 to 18 months, and many are dusting off stimulus measures last seen during the Great Recession in an attempt to maintain production levels and stave off job losses. In Taiwan, the ROC government has taken the bull by the horns and started implementing policy measures aimed at keeping the economy ticking along. At the vanguard of these efforts is ROC Premier Sean C. Chen, who has relevant agencies and ministries formulating appropriate responses based on the likelihood of reduced European demand. Although Taiwan-EU trade reached a 10-year high of 40.1 billion euros (US$50.2 billion) in 2011, a 3.1 percent increase from 2010, this number is not expected to improve for 2012. Fears of the eurozone’s crisis-induced economic slowdown taking its toll on local exporters are weighing heavy, with a drop from 19th largest EU trading partner on the cards for the island. So far, the impact of the crisis on Taiwan’s financial sector has been minimal. Exposure of local banks to Greece, Ireland, Italy, Portugal and Spain is estimated by the ROC Financial Supervisory Commission at NT$23.38 billion (US$780.57 million), or 0.07 percent of institutional assets. The ROC Central Bank is taking no chances, however, unveiling plans to implement appropriate monetary policies to maintain market liquidity and stable exchange rate movements.
 Other steps include FSC stabilization initiatives bolstering local business activity and strengthening risk management capabilities of financial institutions. The commission believes that ensuring Taiwan’s companies are not hamstrung by a tightening of credit, nor an unstable banking sector, is the best way of moving forward in these uncertain times. Additional government programs set down for the second half of the year encompass a series of seminars on boosting Taiwan’s economy organized by the Council for Economic Planning and Development, and nationwide industrial development meetings conducted by the Ministry of Economic Affairs. Although the future of eurozone looks more assured following the election victory of mainstream pro-austerity parties New Democracy and Pasok in Greece earlier this month, the government cannot relax as the situation is extremely fluid. Close attention must be paid to the situation in Greece, Italy and Spain, as well as post-EU summit developments, for any possible impact on Taiwan. The government understands that now is not the time for economic hiccups and stands ready to provide appropriate support for local industries if the European crisis worsens. Taking care of business is an absolute priority that will not be compromised. Write to Taiwan Today at ttonline@mofa.gov.tw |