Brussels, 08/07/2002 (Agence Europe) - At their first meeting since the launching of the Euro, EU Finance Ministers, as well as Finance Ministers from 10 ASEM countries discussed a monetary and financial integration project based on the European model to create a stability zone for a part of the world that has recently been shaken by unprecedented crisis. Rather upbeat with regard to economic perspectives after the recession last year, major investors in Europe and Asia remain, however, on their guard as to fluctuations on the financial markets.
Five years after the speculative attack on Asian currencies in 1997, the Kobe proposal, elaborated within the framework of the research project of the same name launched in January 2001 by ASEM, proposes a three stage integration plan up to 2030 with the launching of a single currency, a central bank and Asian monetary union. At the end of last weekend's meeting under the Danish Presidency in Copenhagen, Danish Minister, Thor Pedersen, explained that the private sector experts' report had provided a "persuasive vision" and would help obtain public support for greater co-operation and that despite the difficulty in finding consensus in East Asia at this early stage, a number of possible areas had to be explored. Mr Pedersen also pointed out that aid and mutual assistance was needed and that the "Union was a model for the future…in Asia". Mr Pedersen explained that regional co-operation had already begun and that he hoped that it would also produce as "formidable results" as the launching of the European currency at the beginning of the year. Those who devised the Kobe plan believe that it would be best for a typical East-Asian country to have a paper currency linked to a central exchange rate based on a basket of major currencies such as the Japanese Yen, the US dollar or the Euro. These theoreticians believe that a mechanism for pooling regional reserves beyond the Chiang Maï Initiative (CMI) would be beneficial in facing down new speculative attacks by creating a network of bilateral currencies in participating countries (ASEA, Japan, Korea and China). Experts say this process is expected to be speeded up and rapidly completed and in the long term go beyond the bilateral agreements to establish a more formal institution for pooling reserves and foreign currencies. The experts' group also believe, however, that in order for such an institution to work, the region would have to respond to worries such as those of an Asian monetary fund acting too generously to a country in crisis and imposing too few conditions. The groups suggests that an independent secretariat be created for ASEAN countries and their three regional ASEM partners in order to efficiently monitor the macro-economic policies of its members. The integration process will probably not begin before 2010 after an initial phase of discussions and the elaboration of a common programme that could be applied temporarily and as a preparatory measure up to 2030. A single currency managed by a central bank, as well as economic and monetary union, could therefore become a reality in Asia.