The meeting received the June 19 cabinet decree and approved the following conclusions reached in the fourth meeting of the finance minister’s senior officials:
1. The Greece crisis stems from a situation where multiple countries with different economic foundations use the same currency. The lack of common ground makes the formulation of an effective monetary policy, such the devaluation of currency, very difficult. As a result, countries must rely on fiscal policy. Allowing Greece to borrow more money will not work, and may even worsen the crisis to Portugal, Spain, Italy and ultimately to other nations around the world. This must be treated as a risky solution.
2. Thailand’s current interest rate policy is appropriate, since the volatility in Europe may cause money to flow out of Asian countries such as Thailand.
3. There should be a plan in place to respond to the possible effects of the crisis on Thailand: (1) There should be data on the amount of money each financial institution holds from Europe that is at risk of flowing out, and a plan to respond if the money indeed flows out; (2) In the event where the European crisis affects Thailand and affects the bank’s debtors, there should be a plan to deal with non-performing loans (NPLs).
4. The Finance Ministry should plan for the event where the European crisis affects Thailand’s stock market and take measures such as establishing a fund to support stocks.
5. The Commerce Ministry should analyze data on Thai exports to Europe and its effects on the level of production in Thai businesses, especially SMEs; the government must be ready to support Thai production and exports in the event that the European crisis affects the nation.
6. The Commerce and Foreign Ministries, along with relevant agencies, should discuss nominating special representatives from Thailand to Europe, who will be responsible for closely monitoring the EU economic situation and liaising with European governments officials to build understanding of Thailand’s economic importance, such as opportunities to invest in various Thai projects that will import machinery from Europe. It is crucial that European governments do not respond to the crisis by cutting off their foreign investments.
7. The Labor and Social Welfare Ministry should plan to help workers who are laid off as a result of industries affected by the European crisis.
8. The nine ministers with economy-related functions should meet weekly to discuss the Eurozone crisis and prepare a comprehensive response. These ministries are the Finance Ministry, Agriculture and Cooperatives Ministry, Commerce Ministry, Transport and Communications Ministry, Tourism and Sports Ministry, Energy Ministry, Foreign Ministry, Labor and Social Welfare Ministry and Industry Ministry. Per the cabinet’s decree, the Finance Minister will chair these sessions.
9. The Finance Ministry, Bank of Thailand and National Economic and Social Progress Agency should assemble a team of officials to monitor the EU situation and report to the Prime Minister.
10. The government should look for opportunities in the crisis, such as accelerating investment projects that will allow the Thai economy to attract foreign investors who are looking for alternatives to Europe.