The Eurasian economic union
The eurozone creates tax-free zones to attract Asian capital.
- Friday, 27 February 2015
While Europe is still trying to get its bearings, looking to the United States, an almost forgotten chimera beckons: the idea of an economic union between the EU and Asia. It’s time for Brussels to acknowledge the opportunities available beyond Moscow, and it is equally important for it to appreciate that Asian investors will only return when the EU's credibility, seriously imperilled between 2009 and today, has been restored. In a growing world that owes much of this growth to the Asian economies, the euro area risks being left out in the cold.
The eurozone isn’t growing, and the European Central Bank (ECB) is working overtime to revitalize the euro area's ailing economy. International investors have realised what's going on and abandoned the euro area some time ago. As the ratings agency Fitch reported in their latest bulletin on the money market fund (MMF), one of the fundamental providers of liquidity for the financial markets, the level of foreign MMF investment in the eurozone in December 2014 was twice as low as it was in 2009. And yet a rebound of some sort has already been achieved compared to December 2011 when the eurozone crisis seemed to have reached a point of no return. In particular, according to Fitch, it's the Asian investors that have pulled out of the EU in numbers. A Goldman Sachs poll of global investors showed that only 5% of investors based in Asia said that they would increase their in interests in the euro area in 2015. This is not enough.
“They are sceptical about the future of the eurozone, but above all, they see no significant opportunities, even taking into account the economic agreements that, after a period of positive negotiations, now seem to have run aground”. This is how the Goldman Sachs analysts have explained this unconsummated marriage between East and West.
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