Instability in Europe and Its Impact on Asia

• Date: 01 July 2018
• Published date: 01 July 2018
• DOI: http://doi.org/10.1111/aepr.12223
• Author: Sahoko Kaji

Instability in Europe and Its Impact on Asia

Sahoko KAJI†

Keio University

In the present paper, we discuss three unintended consequences of European Integration; the

division between the pro- and anti-integrationists, doubts on the benefits of the free movements

and the burden of the welfare state. Since 2017, Europe has regained confidence and optimism

has returned due to sustained economic recovery and election victories of prointegration politi-

cians, most notably in France. The European Union is embarking on co-operation in defense

and security, providing a new reason to support integration. Uncertainty over Brexit and immi-

gration remain among the causes for grave concern. But Europe and Japan have taken a joint

stance against protectionism, while Asia is yet to decide whether to do so as an integrated entity.

Key words: Asia, Brexit, crisis, EU, integration

JEL codes: F02, N14, N15

Accepted: 3 February 2018

1. Introduction

Throughout its long history, Europe experienced political and economic instability.

There were wars and crises, with pockets of peace and stability that emerged through

religious alliances and/or marriages. The late 19th century began to see attempts at

institutionalizing a framework for peace and stability. One notable example was the

Coudenhove-Kalergi plan during the interwar years. But it was only after the devastat-

ing experience of World War II that integration started in earnest.

In terms of avoiding military conflicts, postwar European integration has been a

resounding success. European integration also greatly advanced the wealth and health

of its citizens. However, integration had some unintended consequences

1

which

became renewed sources of instability. Fortunately, the resulting instability has not led

to wars, at least not yet. But crises continue to emanate from the instability, which is

why the unintended consequences are of grave concern. This paper discusses three of

them and their possible implications for Asia.

The first unintended consequence of European integration is the division, even ani-

mosity, between the prointegrationists and the anti-integrationists. Integration

The author thanks Asian Economic Policy Review for the opportunity to write the paper, the

two commentators and the participants who provided valuable comments, and Hirofumi Taki-

kawa for his assistance in collecting data.

†Correspondence: Sahoko Kaji, Faculty of Economics, Keio University, 2-15-45 Mita, Minato-ku,

Tokyo 108-8345, Japan. Email: kaji@econ.keio.ac.jp

© 2018 Japan Center for Economic Research 243

doi: 10.1111/aepr.12223 Asian Economic Policy Review (2018) 13, 243–257