- The Washington Times - Friday, May 18, 2007

Excerpts of editorials from newspapers around the world:

People’s Daily Online

U.S. economy at crossroads

BEIJING — The U.S. economy is at a crossroads. The country is uncertain as to whether it should fight inflation or recession. The Federal Reserve Bank has decided to keep the interest rate at 5.25 percent. [Dallas] Federal Reserve President Richard Fisher said that the U.S. economy is likely to go through a period of slow growth in 2007. However, what he worries about most is inflation, despite the fact that the growth rate was just 1.3 percent during the first quarter of this year. Retail sales were also down for the first time in seven months, which shocked the stock market.

Federal Reserve Board Chairman Ben S. Bernanke also thinks that the U.S. economy will slow this year, but he doesn’t think there will be a recession. However, former Federal Reserve Chairman [Alan] Greenspan thinks that a recession is possible.

Whether the U.S. economy will experience a recession depends largely on the housing market. An economic soft landing will depend on whether the heated housing market can be controlled.

… Falling housing prices has decreased the value of property ownership rights. As a result, many mortgagers have delayed payment or breached their contracts. During the first quarter of this year, delayed mortgage payments were at a record high. While the mortgage quality is low, the loan quantity should be high. However, unpaid mortgages continue to grow at double-digit speed, with the total volume twice that of five years ago. … If car sales also drop, the U.S. economy will really slow down.

London Telegraph

New French era

France has entered a new era with the inauguration of its first president born since the Second World War. Nicolas Sarkozy begins his five-year mandate having won a handsome majority on a very high turnout.

He thus brings to an already powerful office an exceptional stamp of legitimacy, which he will use later this summer to launch reforms aimed at freeing the economy from the fiscal and regulatory shackles in which, for far too long, Jacques Chirac cowardly acquiesced.

“There is a demand for change,” Mr. Sarkozy said in his inaugural address. “Never have the risks of inertia been so great for France as they are now in this world of flux, where everyone across the world is trying to change quicker than the others, where any delay can be fatal.”

Yet, just as this right-wing politician has proved no Thatcherite free-marketeer when it comes to protecting French industry from foreign competition, so also he is being remarkably nonpartisan in the choice of his Cabinet. …

In seeking to erect a broad tent, in which half the posts will be filled by women, Mr. Sarkozy is turning his back on the cronyism of the Chirac years and attempting to fulfill the duty of the head of state to represent the whole nation.

Malta Independent

Adopting euro

MALTA — Just over six months from now, Malta will have a new currency — the euro — and the whole of Malta should be proud of the work that went into meeting the convergence criteria that allowed us to make this next step towards eurozone integration, said Prime Minister Lawrence Gonzi [this week].

Speaking in a live televised press conference held at Castille, Mr. Gonzi said: “Malta has passed an exam that it had to study long and hard for. We have met the European Commission’s criteria.”

Mr. Gonzi said that he knew three years ago, when Malta first began pushing to get ERMII status, that it was an ambitious plan. “We had a 10 percent deficit and we needed to get that to below three percent. We managed, and the whole country has a lot to be proud of. …

“The European Commission examined everything down to the last scrap of data, and we were told that our report and our work was credible and sustainable,” he said.

However, Mr. Gonzi urged caution: “We should not be euphoric and go overboard. People should just keep their cool and wait for the official changeover date. Until January next year, the euro will still be regarded as a foreign currency and charges will be made accordingly,” he said.

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