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Business Home > International
Europe seeks Asian support on debt crisis

(AFP) / 5 November 2012

uropean leaders said on Monday they were finally getting a grip on the eurozone debt crisis and urged Asia to do more to boost global economic growth.

Top European officials at a major summit in impoverished Laos, including French President Francois Hollande and Italian Prime Minister Mario Monti, led efforts to encourage much-needed trade with Asia’s fast-growing economies.

Europe has made a “huge effort” to tackle the euro crisis “by more coordination, by fleshing out the future of a genuine economic and monetary union”, Monti said, noting that Asia also faced slowing economic growth.

“Past events showed us that the current crisis does not stop on the edge of town but it is really knocking at all doors,” he warned.

Dozens of leaders jetted into the small landlocked nation for the Asia-Europe Meeting, which provides an opportunity to strengthen trade links between two regions that together account for about half of global economic output.

There were calls for Asia to play a greater role in efforts to revive the world economy and to renounce trade barriers, after years of rapid growth in the region on the back of rising exports to Europe and other Western markets.

“Promoting trade is not only fostering domestic demand but also avoiding protectionism,” said European Union president Herman Van Rompuy, who sought to allay fears that the eurozone might break up.

“The financial stability of the eurozone is much stronger than a few months ago. The euro is an irreversible project and on this basis growth can pickup in the course of 2013,” he said.

For years Western outrage over Myanmar’s human rights abuses — including the longtime detention of Nobel laureate Aung San Suu Kyi and other political prisoners — was a major cause of friction between the two regions.

Unlike other participating nations, Myanmar was only allowed to send its foreign minister to previous Asia-Europe summits.

But after reforms including the release of political detainees and Suu Kyi’s election to parliament, the West has begun easing sanctions to reward President Thein Sein, who was among those attending the two days of talks.

Optimism over the sweeping changes, however, has been dampened by deadly clashes between Buddhists and stateless Rohingya Muslims in Myanmar’s western state of Rakhine.

British Foreign Secretary William Hague called on Myanmar to address “the unresolved problems of the status of the Rohingya people”.

“That’s an issue of major concern for us. I’ll certainly raise that with the Burma leaders here when I have the opportunity to do so,” he told reporters.

Dozens of people have been killed and more than 100,000 displaced by the unrest since June.

The violence is also “an issue of concern” for Southeast Asia, Indonesian Foreign Minister Marty Natalegawa told AFP.

“But the fact that we can meet here in the heart of Southeast Asia almost without having Myanmar as an issue centre-stage as it has been in the past is a reflection of how far Myanmar has travelled in terms of its democratic transition,” he added.

Europe’s diplomatic offensive is seen as a sign of the growing importance that it places on Asia’s vibrant economies.

“With the EU in the middle of a lost decade and facing protracted recession and fiscal austerity, European political and business leaders are turning to Asia’s fast-growing economies for economic salvation,” said Rajiv Biswas, Asia-Pacific chief economist at consultancy firm IHS Global Insight.

Europe’s leaders may lobby Chinese Premier Wen Jiabao to deploy some of Beijing’s trove of about $3 trillion in foreign exchange reserves — the largest in the world — to invest in EU bailout funds.

At the same time Hollande criticised the inflexibility of the Chinese yuan and certain other Asian currencies, calling for “fair exchange rates”.

“Asians have gained a lot from our growth. Now it’s time for them to boost our growth with their demand,” he added.

Wen told the summit that his country had “promoted a balanced growth between imports and exports”.

“This shows that China is an important engine for world economic growth and has played a crucial role in driving the global economic recovery,” he said.


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