Two crises, two responses: adjustment of economic governance in ASEAN and the European Union

Abstract

The financial crisis of 1997/1998 in Southeast Asia triggered institutional developments inside the Association of Southeast Asian Nations (ASEAN) and beyond. They deepened intra-regional cooperation in the economic area and laid down the foundations for the ambition of creating an ASEAN Economic Community that would allow easier exchanges of productive factors. Concurrently, ASEAN also widened its response in the financial domain by initiating various "ASEAN plus" arrangements to pool risks and address volatility in financial markets. The European Union (EU) was hit by the global financial crisis in 2008 and subsequently by the sovereign debt crisis. The EU response to this has been a deepening of legally binding macroeconomic cooperation and the strengthening of the regulatory framework. On top of this, and contrary to the ASEAN case, the EU 27-Minus initiatives go further towards closer political coordination. In parallel, the legally binding scheme has been adopted to strengthen the stability of the Euro Area. This paper analyses the policy responses in both regions to their respective crises. It aims at understanding the driving forces behind the different policy responses, looking at both the regionspecific and the more generic institutional and regulatory responses to the crises.

Differentiated integration in the European Union: towards a comparative regionalism perspective

“…The construction of the ASEAN Economic Community -a key aspect of the region's development plans -is explicitly grounded in the multi-speed idea (Nesadurai 2008), but also accepts that states may opt-out of particular regimes (e.g., Malaysia and automobile kits), and that 'a certain amount of flexibility is pre-agreed' (Ewing-Chow 2008: 227). The 'ASEAN Plus' project allows the region to bolster its function as the heart of regional co-operation in East Asia, cementing its role as a collective actor while undertaking joint initiatives with other states, e.g., the Chiang Mai initiative on currency swaps and bond market liquidity, established as a response to the Asian financial crisis of 1997 (Blizovsky 2012;Wunderlich 2012). Indeed, it may also be that ASEAN has a de facto external policy leadership group, using United Nations (UN) agencies and administrations of Cambodia and East Timor (Henry 2007).…”