Global Economic News

Japan's Damage Estimate Tops $300 Billion

March 23 (EIRNS)—Japan's government said the cost of the earthquake and tsunami that devastated the country's northeast could total between 16 trillion yen and 25 trillion yen ($309 billion), according to a Cabinet Office estimate made public on March 23.

That first, official figure is considerably higher than other, private estimates. Much of the increase can be ascribed to the secondary disruption from electricity blackouts and the closure of plants not directly affected.

The Japanese press was reporting that Tokyo Electric Power Co. will likely continue its rolling blackouts for at least a year, due to damage at two large thermal power plants. The prolonged power outages through the Summer and Winter will affect not only residents of Tokyo and surrounding prefectures, but also industry. Fukushima Prefecture, and the Hitachinaka thermal power plant in Tokai, Ibaraki Prefecture, were both severely damaged in the tsunami. The two damaged thermal power plants have a combined output of 4.8 gigawatts, just greater than the damaged Fukushima Daiichi plant, which was capable of generating nearly 4.7 gigawatts.

Toyota, for example, has halted auto production beginning March 14 because of difficulty in securing components, including rubber parts and electronics. Around 150,000 units of production have been lost, so far.

The official casualty reports to date are 11,082 dead and 16,717 missing. None of these are due to the problems with nuclear plants.

Sane Voices Speak Up for the Future of Nuclear Power

March 21 (EIRNS)—In addition to the Chinese, Indian and Russian support for nuclear fission for power generation, reported earlier, sane voices have also emerged in South Africa and Sweden in the wake of the Ring of Fire events. In both countries, discussions on developing advanced nuclear power reactors have begun. On March 20, the leading Swedish daily, Dagens Nyheter, carried a two-page feature, "Nuclear Power of the Future Will Be Safer."

The article pointed to the Generation 4 reactors, now promoted in Sweden. These reactors will be lead-cooled fast reactors (LFR), a fast-spectrum lead or lead/bismuth liquid metal-cooled reactor and a closed fuel cycle for efficient conversion of fertile uranium and management of actinides.

The fast breeder reactor mentioned in the article is the new sodium-cooled test rector, called Astrid, planned for France. The Swedish researchers interviewed in the article said they were developing a lead-cooled fast reactor called Electra. There is also a plan to develop a similar LFR in Europe called Alfred. Since lead is used as the coolant and it boils at 1,740°C, as opposed to water boiling at 100°C, the loss of coolant in LFR can only occur when the reactor temperature reaches a very high temperature.

In addition, last week Reuters Africa reported prominent voices in South Africa calling for the revival of the pebble bed modular reactor (PBMR) as a measure to eliminate altogether all nuclear radiation-related accidents. Last September, the South African government stopped funding the development of PBMR.

Pointing out the advantages of the PBMR, Kelvin Kemm, a Pretoria-based nuclear physicist, said in the article: "The reactor would not need any external cooling. It would cool itself. It's walk-away safe." "At a nerve-jarring 2004 demonstration for journalists, the operators of a small Chinese pebble bed reactor abruptly closed down its coolant system. And then quite literally walked away," said Kemm.

The article said the program may need to be industry-led, since the South African government, after having invested nearly 10 billion rand over a decade, had abandoned it, considering it a bad business investment. "There is lots of merit for the technology, specifically for building power plants away from places where you could potentially have tsunamis," said Cornelis van der Waal, an analyst at consultancy Frost & Sullivan.

Former Irish Premier: Separate Sovereign from Private Bank Debt

March 22 (EIRNS)—Former Irish Prime Minister John Bruton slammed European Central Bank president Jean-Claude Trichet for the Irish banking and debt crisis today, while calling on Ireland to win back its economic sovereignty, which it fought to win in the 1916 revolution.

Bruton, who is currently president of the Irish Financial Services Center, was speaking at a briefing for the Irish Institute of Chartered Accountants, where he reiterated his earlier comments, in which he charged that the ECB should have intervened in the regulation of the Irish banking system. But he went one step further, saying, "The credit of the state itself has unfortunately become entangled with that of the banks. It would be no solution to anything to enhance the credit of the banks, by diminishing the credit of the state. I hope EU decision-makers will also see that the Irish banking problem has been influenced by the requirement of free movement of capital within Europe since 1990, and the deep interdependence that that has created, with all its good and bad aspects."

Targeting the ECB for responsibility of the suicidal bank guarantees implemented by the previous Fianna Fail government, he continued: "A suggestion has appeared in the Irish media that, when Anglo Irish Bank was on the brink of collapse, the ECB told the Irish authorities that it did not want any bank to be allowed to fail—I wonder if this could be true, and if it is true, if it influenced the then-government to give such a wide guarantee to the banks as it gave. In light of the powers of the ECB, the Irish authorities could not easily have ignored such a view from the ECB. But with power comes responsibility, and if the ECB did say this to the Irish authorities, it can hardly argue now that the sole responsibility for what followed rests with the Irish taxpayer."

According to FinFacts Ireland, on Sept. 20, 2008, a week before the issue of the state banking guarantee, Trichet had a phone conversation with the then-Finance Minister Brian Lenihan, in which Trichet reportedly said, "You have to save all the banks." Trichet has neither confirmed nor denied the report.

Bruton said all the pain and sacrifice of the 1916 Rising had been lost now that the country no longer has economic independence, and that Ireland needs to fight to get it back.