LONDON • The Romans had a word for it: "annus horribilis", a horrible year. And that certainly has been Europe's fate this year, as the continent was hit by one crisis after another. Potential bankruptcy for some of the European Union's member states, millions of refugees pouring in through borders that nobody seems able to enforce, squabbles between EU countries, deadly terrorist attacks perpetrated by Europeans against their own countrymen and racist politicians on the march - Europe experienced just about every disaster this year. The latest edition of Foreign Affairs, the magazine that serves as a bible to armchair strategists, decries the "European disunion", while a lengthy recent article in The New York Times, another point of reference for global analysts, wonders whether Europe's political system is now so dysfunctional that the continent has "reached a breaking point", the sort of question which, of course, The New York Times seldom asks about the United States. First, a few statistics to serve as a reminder of the place that Europe actually occupies on the global stage. It is still the world's wealthiest continent. Four of the world's top 10 economies are European, compared with three in the same category for Asia. And although its share of both world trade and wealth has declined over the past few decades - not because the EU's overall economy has shrunk, but because other economies have grown faster - Europe is still the world's largest trader, accounting for around 15 per cent of global trade. One would be tempted to assume that much of the trade is in old wines, smelly cheeses and expensive handbags, the sort of stereotype goods for which Europe is known. But one would be dead wrong: Around 40 per cent of European exports are composed of top-notch machinery items, precision instruments and transportation equipment. If this is a continent on its death knell, then one would wish others no worse fate. The EU remains a good "global citizen" in many other respects. It provides more than half of all the world's official development assistance. Only five countries in the world have actually met the pledge that countries gave to the United Nations to devote 0.7 per cent of their gross domestic product (GDP) to aid, and all these five are European nations. In the throes of its worst recession since World War II, Britain zoomed up to the top of the development aid donors' list, worldwide; that's not an indication of either a nation with an "insular" outlook, or an isolationist continent. It could be argued that trade is more effective than aid in alleviating global poverty. But here again, Europe trumps. If trade in fuels is excluded, the EU imports more from developing countries than the US, Canada, Japan and China put together - another fact that Europe's detractors routinely ignore. The enduring problems surrounding the operation of the euro, the continent's single currency, are clearly a matter of global concern, if only because the euro is the second-largest reserve currency in the world and now surpasses the US dollar in the combined value of cash in circulation. So, International Monetary Fund chief Christine Lagarde was undoubtedly right when she recently pointed out that many of the problems which contributed to the euro crisis have yet to be addressed, and that the slowing world economy raises the possibility of further pressures on the euro next year.
The Straits Times Photo
