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ASEM speech: The lasting crisis in Europe and the continuing growth in Asia: Why is it so?

English Pages, 5. 11. 2012

Mr Chairman, dear colleagues,

I would like to thank the organizers of the summit for giving many of us the possibility to for the first time visit Laos. I am convinced this meeting will make Laos the focus of world attention in these two days and I am sure the country deserves it.

I have been looking forward to this meeting because ASEM has become an important platform for dialogue between heads of states and governments of European and Asian countries. It gives us not only an opportunity to discuss issues of mutual interest, to strengthen relations between our countries, to hear each other’s views and learn from them.

During the two years which have passed since the last ASEM summit in Brussels not much has changed in the world. The crisis in the Eurozone continues, if anything, it has deepened. The public debt in several European countries has substantially increased, while most of the countries of Asia have continued to grow. These are two basic points of departure for me and – I assume – for all of us.

What bothers me are neither the short-term economic problems in both regions nor the causes for increase or decrease in this or that partial economic indicator in the past trimester or year. I am concerned and worried about the long-term trends, although even the short-term forecasts are saying something: For the next two years, the International Monetary Fund predicts the GDP growth of only up to 1% for the EU and the Eurozone countries, and around 7% or 8% for Asia.

These figures make it evident that today’s economic problems cannot be characterized as global. Therefore, they cannot have a global solution and cannot be solved through global governance. The recent crisis which affected Europe and the United States – and which has been mistakenly described as global by some politicians and economists – has only drawn attention to the facts which were obvious already for some time. The European economy has been losing its dynamics for several decades, which is in sharp contrast with other regions of the world, especially with the economies here in Asia.

Looking at it from the perspective of one of the European smaller countries, the Czech Republic, we see two main problematic characteristics of current Europe. On the one hand, the Eurozone, this bold and risky project, is composed of countries with very different, and as it becomes evident mutually incompatible economic parameters. As a result of it, one currency is used for a very dissimilar group of countries, which leads – as we see clearly – to a huge economic and financial inconsistency and untenable debt. On the other hand, the economic and social system in Europe is too protective. It is not motivating enough and does not create sufficient incentives for fast economic growth. To change it is, of course, European homework.

Even though the Czech Republic is not a Eurozone member and is troubled neither by the problem of excessive public debt nor by the threat of a banking sector crisis, I am not speaking here as an uninvolved observer. The Czech Republic is a part of the European Union. It is a small open economy, and as such is affected by the European crisis. More than 83% of Czech exports go to the EU area and one of our economic goals is to change this proportion and to increase our trade with non-European, that is also Asian, countries. That is an additional reason why I consider the summit here in Laos exceptionally useful.

To achieve such a goal, to increase trade and other forms of economic relations, our discussions and efforts should concentrate on ways to remove the remaining trade and investment barriers which still exist between European and Asian countries. It is a crucial task for us all. We should be searching for ways to make our markets more accessible for each other.

Once again, I would like to thank the Lao hosts for the preparation of this summit and for their hospitality.         

Václav Klaus, Asia-Europe Meeting (ASEM), National Convention Centre, Vientiane, Laos, 5 November 2012


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