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Europe still a model for Asian integration?

Publication Date : 09-11-2012

 

The ongoing eurozone crisis has raised the question whether the European Union (EU) is still a model for regional integration for Southeast Asian countries. The euro provides less flexibility for countries affected by sovereign debt to manoeuvre their way out of economic trouble.

At a recent Asian-European Editors' Roundtable organised by Konrad Adenauer Stiftung, two experts exchanged views on why the EU is a success story. In addition, should Southeast Asian countries strive for some kind of integration with the ultimate objective of creating permanent peace in the region.

Professor Friedbert Pflueger, chief executive officer of Pflueger International Consulting GmbH, a former politician of the German Christian Democratic Union (CDU), insisted "the EU is a great success story". European history was shattered by wars between arch-enemies France and Germany. But the EU project, starting with cooperation in coal and steel, has so far brought long-term peace.

"We have lived with peace in the EU for 60 years. Peace is self-evident and natural for people in the EU," said Pflueger, who is also the German secretary of state in the Federal Ministry of Defence.

The euro-zone debt problem is a crisis in the big picture of the EU project, which has overcome many challenges in the past, including the fall of communism in Eastern Europe in 1989, leading to German unification in 1990. "Under the leadership of Chancellor Helmut Kohl, it was possible to combine German unification and the currency union project," Pflueger said.

While the eurozone debt crisis dominates headlines in the press, the EU is in fact "a political move," Pflueger said. Therefore, there is no question of whether the EU should have Greece and Italy on board. "For political reasons, for stability, there's a consensus to have them in the euro," he said.

The EU members are closely connected. Seventy per cent of exported goods from Germany go to other EU countries. And now, countries such as Spain, Greece, Poland and Ireland have received rescue funds from the EU to help them through their financial woes.

The crisis erupted in 2009 when it was found that Greece had a high hidden deficit. There was a sudden uproar, but a lack of firm assurances from EU leaders made the matter worse.

"Had the EU said at that time, we know the problem and the EU can handle it [the situation would not have been so bad]. However, the reaction from the EU was ambiguous, causing chain reactions in other euro-zone countries such as Spain and Italy," he said.

The crisis caused by a lack of trust is critical. "Japan's public debt is higher but people trust Japan," he added. "We have to restore trust."

He dismissed the notion of Greek exiting the euro, saying, "Greece leaving will cause the destruction of the EU. Old prejudices between the north and south [of Europe] will be back."

But if the EU has been successful in ensuring peace, does it serve as a model for Asia to follow?

Brahma Chellaney, professor of strategic studies at the Centre for Policy Research, said that compared to Europe, the inter-institutional structure in Asia is not adequate to provide for regional integration on the lines of the EU.

The Asean project, created in 1967, was aimed at bringing peace and stability to the region in the same way as the European project did. Asean started the Asean Free Trade Area in the early 1990s and is now moving towards the Asean Economic Community (AEC), to promote freer flows of goods, services and capital across the region.

However, Asean leaders have so far shied away from discussing political and security issues in the region, such as territorial disputes in the South China Sea. In addition, Asean countries have different views on the presence of the superpowers in the region. On the Obama administration's military "pivot" to the region, the Philippines welcomes the plan but some countries like Thailand do not want to offend China.

Chellaney said that regional integration in Asia is contingent on a number of factors.

First, Asian countries have to get rid of the baggage of history and negative legacies. Asians have to come to terms with history, as the European countries have done, before moving on to other areas of cooperation.

Secondly, Asian countries have to deal with rising nationalism, which, in the Asian context, comes with an increase in wealth. "The more prosperous, the more nationalistic countries become," said Chellaney. "There is a surge of identity of roots, and governments tend to whip up nationalism."

Thirdly, Asian countries will have to balance the threat of hegemony and the dominance of China, which has risen to become the most powerful force in the region. This is despite the fact that smaller countries in Asean were instrumental in persuading countries in Northeast Asia to join the East Asian Summit, to promote regional talks.

Fourth, there should be common norms and values as the core reason for the integration. The EU criteria lie in the belief in democracy and the market system. Asia, however, has diverse political systems. "We talk about "the Asian way" but no one knows what that is. There is no history of "Asia-ness". An "Asian concept" has not emerged," the Indian expert noted.

Fifth, Asia is facing the challenge of a widening gap between political and economic progress. The economic horse is galloping far ahead but the political horse is lagging way behind.

Asian prosperity is the result of booming trade in the region, but this can become fragile due to political fissures. For instance, Japanese exports to China in September fell more than 10 per cent compared to last year after relations between the two countries soured as a result of the territorial dispute over the Senkaku/Diaoyu islands.

"The economy alone is not sufficient to create goodwill," said Chellaney. He added that Asian countries should also draw a lesson from the EU on how the regional effort has helped reduce the wealth gap among the member countries.

 

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