Impact of Financial and SovereigDebt Crisis on EU-East Asia Economic Partnership
Lay Hwee Yeo, EU Centre in Singapore / Singapore Institute of International Affairs
The 2008 financial and economic crisis had its origins in the developed economies of the west but quickly spread to Asia as liquidity issues led to a credit squeeze with impact on the real economy. Although developed countries were more affected than developing countries, the crisis led to a collapse in global trade and all countries were affected, particularly export-oriented Asian economies. It debunked the growing belief that the Asian economies have decoupled from the West. This paper analyses the consequences of the ongoing financial crisis on the economic partnership between the European Union and East Asian countries and considers the implications that a recession in the euro area might have on the EU’s trade and investment relations with China, Korea, Japan and the ASEAN countries. It then contemplates the broader trends of the new economic circumstances facing the EU and East Asia, and how they would impact overall EU-East Asia partnership in this changing landscape of global economic governance.