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Monday, June 25, 2018

Blocs rock

The EU and ASEAN reiterate the principles governing economic recovery

Written by The Indian Express | Published: March 3, 2009 11:30:34 pm

As the economic crisis intensifies,with the trough of economic recession spreading ever-outward,several things are known,and indisputable: first,that it is a global crisis — something affecting everyone,solved only by everyone acting together. Second,that political leadership’s needed,that also recognises the importance of the first principle. Last week,these columns noted with disappointment that the American president wasn’t setting an example. Over the weekend,however,some good news emerged elsewhere: at the special summit organised by the European Union in Brussels,leaders from Old Europe and New Europe — now perhaps more appropriately Humbled Europe and Stumbling Europe — stood shoulder to shoulder to decry protectionism and to hail co-ordination; and,in Bangkok,the leaders of ASEAN issued a similar message. As China’s state-run news agency put it,the word “cooperation” was “mentioned time and time again

in official documents and leaders’ addresses.”

Of course,this covers up substantial problems. The Europeans,for example,are deeply concerned that the less-prosperous East is close to collapse; but the West doesn’t want to spend its tax euros bailing them out unless there’s continent-wide systemic risk. Even within the West — the eurozone — the prudent North is deeply averse to bailing out the reckless spenders of the South,such as Berlusconi’s Italy. In Asia,similar pressures operate: Malaysian Prime Minister Abdullah Ahmad Badawi told a local paper that it was a “normal reaction” to push local goods during crises.

Nevertheless,what matters is that these countries have recognised that,at least within their trading areas,international,co-ordinated responses are important,that economic nationalism is deeply problematic. India,too,should resist efforts to portray the isolation born of ignorance as protection rather than backwardness. Responses should be forward-looking; President Obama,take note. We can but hope that the fact that British Prime Minister Gordon Brown is today the first European leader to visit post-inauguration — instead of,say,France’s President Sarkozy,who tried to push a protectionist auto bailout past the EU — means that a change is coming to DC.

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