| NUSA DUA, Indonesia
NUSA DUA, Indonesia Nov 19 Japanese Prime
Minister Yoshihiko Noda said on Saturday Asia needs to consider
further steps to avoid a financial crisis as the euro zone's
debt problems could spill into the region.
While Asia has become more resilient due to its economic
management since the region's own financial crisis in 1997/98,
it is not immune to Europe's problems, Noda said.
"I don't think Asia is necessarily vulnerable to external
shocks (from Europe)," Noda told a news conference after the
East Asia Summit on the Indonesian resort island of Bali.
"Given efforts to conduct sound economic policy, the region
generally enjoys a current account surplus and its foreign
reserves are at high levels, so it has become more resilient to
"Having said that, there is no doubt that we could face
adverse impact if we cannot build a firewall against the
Policymakers around the world are worried that Europe's
inability to unify around a debt strategy could hurt their
Greece, Ireland and Portugal - all small, peripheral euro
zone economies - have already been forced to accept EU/IMF
bailouts as they can no longer afford to borrow commercially.
Now Italy's borrowing costs have reached unsustainable
levels, while Spain's are nearing this point and the crisis is
even starting to affect triple-A rated France.
While giving no details on what kind of further steps Asia
should take, Noda said boosting regional financial cooperation
is basically the way to go as Asia tries to prepare itself for
possible meltdowns in Europe.
Japan, China and South Korea lead a $120 billion emergency
fund, under the so-called the Chiang Mai Initiative, with the
10-member Association of South East Asian Nations (ASEAN) - part
of a move to strengthen ties and avert the repeat of the
1997-1998 Asian financial crisis.
In a move to beef up its foreign exchange defences in the
wake of global uncertainties, South Korea last month signed an
agreement with China to double the value of their bilateral
currency swap pact after securing a similar deal with Japan.
In addition to such efforts, Asia needs further crisis
prevention measures, Noda said.
"Japan is leading discussions on how to prevent crisis and
on introducing further steps to avert crisis at a regional
level. We need to quickly wrap up those and I proposed that at
the summit of ASEAN+3 (ASEAN plus China, Japan and South