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Solving the euro crisis: a European and Asian perspectiveA report from the 7th JPI-FNF Joint Workshop in Jungmun, Sept. 20
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승인 2012.09.21  11:37:45
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▲ Photo courtesy JPI

The 7th Joint Workshop of Jeju Peace Institute (JPI) and Friedrich Naumann Foundation for Freedom (FNF) was held on Sept. 20 at JPI in Jungmun. "Euro Crisis: Causes and Consequences for Europe and East Asia" proved a timely topic generating energetic participation by the scholars and other experts in attendance.

The morning session addressed the effects of the euro crisis and EU monetary instability from a European point of view, analyzing historical precedent, motivation, effects and efforts toward a return of stabilization. In the afternoon, potential effects of the European crisis on the Northeast Asian region were scrutinized and predicted.

Several presenters, notably including Uwe Wissenbach, head of the mission delegation of the EU to Korea, suggested that this region's 1997-8 financial crisis and subsequent processes of recovery could serve as a model for current such endeavors undertaken by the EU. Wissenbach and others also mentioned that it is likely this prior experience which then enabled Northeast Asia to recover from the recent global financial crisis more readily than other regions.

In his introductory remarks, FNF local organizer Dr. Lars-Andre Richter identified the current initiatives toward economic and political cooperation among Northeast Asian nations of China, Korea and Japan, advising with a hint of irony that these countries might view the EU experience as simultaneously a model for such union — and a cautionary tale.

JPI, which strives to be "the Geneva of Asia" according to outgoing president Ambassador Han Tae-kyu, also organizes the now-annual Jeju Forum for Peace and Prosperity toward this very goal.

The keynote speech was given by Dr. Lee Jong Wha, senior advisor to the President of Korea on matters of international economics. Citing a 1.5 percent growth rate for the Eurozone last year with an expected negative rate for 2012, he identified a general prolonged, strong skepticism regarding the EU's ability to overcome versus long-term stagnation and possible dissolution.

Supporting "rescue" initiatives, Dr. Lee cited the urgent need for more decisive and competent action in order to solve problems and restore confidence in growth, including stability measures, promotion of fiscal responsibility, balancing of northern and southern regional economies, financial restructuring and labor market reform.

Dr. Lee further suggested that the EU could learn from East Asia's 1997-8 crisis and recovery in order to deal with the root problems regardless of how painful or politically unpopular they might be. On a positive note, he identified recent efforts at stabilization including the Economic and Monetary Union (EMU) and the Fiscal Compact signed in December of 2011.

Korea, having executed its Free Trade Agreement with the European Union effective July 2011, could be viewed as particularly vulnerable to the EU common currency crisis. Rather than increasing its exports to the Eurozone as anticipated, according to personal conversation with Dr. Kim Heungchong of Korea Institute for International Economic Policy in Seoul who was a presenter at the workshop, the export rate of Korea to Europe actually decreased by more than 10 percent in the first year of its FTA with the EU.

Conversely, since the local economy is relatively strong and stable while that of the EU is weakened, the import rate of European products to Korea increased considerably during the FTA's first year, according to Dr. Kim. Ambassador Chung Dal-ho, director of the Cifal-Jeju UNITAR education center, further described this phenomenon of financial imbalance by citing the example of Chinese investors who, having begun buying French vineyards in earnest as of last year, recently purchased the famed Chateau de Gevrey-Chambertin.

Germany is the recognized leader in the European crisis, currently maintaining the strongest economy in the Eurozone and, in an earlier model for the EU, having driven the region's financial system via the Bundesbank as described by Dr. Michele Chang of the College of Europe in Belgium. Dr. Chang identified a rule-based, asymmetric system; monetary but not political union; and, a lack of consensus regarding the way forward for both institutions and policy.

   
▲ Photo courtesy JPI

Dr. Peter Almiks, from the Liberal Institute in Potsdam and affiliated with the FNF, presented his model for German involvement in which the country is not penalized for having the strongest economy. Germany, according to Dr. Almiks, should remain supportive but not bail out the Mediterranean countries of Portugal, Italy, Greece and Spain, an act which in his estimation would only reward financial "misbehavior." He further cited five articles of European law that have been violated throughout this crisis and suggested a model in which financial regulations are strengthened and reformed to result in a fourth version of the Basel agreement re: same.

Coming from the perspective of political theory rather than economics, Dr. Thomas Kalinowski of Ewha Women's University in Seoul offered a fresh perspective. Referring to the future of the Eurozone as one structured as a "state," he suggested "democratizing" the EU in matters of electing officials and, in general, functioning less as a union of sovereign nations and more as a single governing body.

Dr. Kalinowski and several other presenters referenced America's role in this crisis, citing the continual printing of US dollars as needed without financial backing and the long-time role as "world police" with seeming self-interest as motivation.

On a somewhat surprising and controversial note, Dr. Rhee Yeongseop of Seoul National University supported and described a model for a regional currency union among the three Northeast Asian countries. He suggested a strictly monetary or currency integration, not a broader dynamic process toward a long-term goal of political union. To support his theory, Dr. Rhee cited increasing instability of exchange rates in this region due to the European crisis, as well as protection against external problems, similar arrangements in other regions, and an urge to increase international authority of the Northeast Asian nations.

This is the seventh such workshop between JPI and FNF. Examples of previous workshops include "Reconciliation: Making Peace with History," "Challenge and Response in Northeast Asia: Fulfilling the Jeju Process," and "World Food Crisis: Social and Economic Challenges in Northeast Asia," among others.


Dr. Hilty is a cultural health psychologist living on Jeju Island.
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