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- compose 3 questions for discussion
Economic Crisis and Regional Integration
Mar 4, 2009 Harold James
Harold James
Harold James is Professor of History and International Affairs at Princeton University. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, Making the European Monetary Union, and The War of Words.
In the 1930’s, Germany and Japan resorted to forcible regional integration, not economic nationalism, in response to economic crisis. By contrast, in today’s crisis, the largest members of the European Union, the best model and greatest hope for benign regionalism, have turned their backs on integration.
PRINCETON – Everyone now knows that we are in the worst economic crisis since the 1930’s. The protectionist responses are sadly familiar: protests against foreign workers, demands for trade protection, and a financial nationalism that seeks to limit the flow of money across national frontiers.
In the 1930’s, however, economic nationalism was not the only show in town. Many people started to think of regional integration as the answer to depression. But the sort of integration that occurs in times of economic crisis is often destructive. The most unattractive versions of 1930’s regionalism came from Germany and Japan, and represented nothing less than a practical extension of their power over vulnerable neighbors, which were forced into trade and financial dependence on the basis of Germany’s Grosswirtschaftsraum or its Japanese equivalent, the Greater East Asia Co-Prosperity Sphere. As a consequence of the horrors of the 1930’s, there remains substantial suspicion of concepts like “Greater East Asia.” In the second half of the twentieth century, Europe had the chance to build a much more benevolent form of regionalism. But today, the European Union is stymied by having squandered the chance to build stronger institutions when times were better and tempers less strained. The EU is suffering from a number of problems that have been widely discussed for many years, but never seemed to be that urgent. Suddenly, in the face of the economic crisis, these problems have become major sources of political instability. There is a common monetary policy in the euro-zone countries, and an integrated capital market with financial institutions that are active across national frontiers. But banks are regulated and supervised nationally – as they must be, because any rescue in the event of a large bank failure becomes a fiscal issue, with the cost borne by taxpayers in individual states rather than by the EU as a whole. But this set-up makes little sense in the face of the economic logic of European integration.
The second obvious problem is the smallness of the EU’s budget relative to those of the member states. The vast part of government activity takes place on a national level. But different governments have different degrees of fiscal room for maneuver. Italian, Greek, or Portuguese public debt is so high that any attempt to use fiscal spending as part of a strategy to combat the economic crisis is doomed to fail. But Ireland, with previously modest deficit and debt levels, also suddenly and unexpectedly faces the same kind of issue, owing to the government’s need to take over private debt from the banking sector. France and Germany, by contrast, have an inherently strong fiscal position. So only the EU’s strongest countries can really do anything against the sharply worsening recession. Moreover, the whole idea of Keynesian demand stimulus was developed, again in the 1930’s, in the context of self-contained national economies. Keynesians filled up the warm water of fiscal stimulus in a national bathtub. When the national bathtub has holes, and other people benefit from the warmth, the exercise loses its attraction. In any case, it only ever worked for the larger states. The smaller states could not do Keynesianism in a hand basin. There are ways to fix both the banking and the fiscal problem. Control of banking is the simplest. The European Central Bank clearly has the technical and analytical capacity to take on general supervision of European banks, using the member central banks as information conduits. The fiscal problem could be dealt with by issuing generally guaranteed European bonds, which might be a temporary measure, restricted to the financial emergency. Both bank regulation and fiscal policy require a great deal more Europeanization. The most obvious way is to use existing mechanisms and institutions, in particular the ECB or the European Commission. The difficulty with such a suggestion is that it would imply a relative weakening of the national states, including the largest, Germany and France. They would most likely resist, and try to stay in their own bathtubs. Indeed, the crisis has turned France and Germany once more into the key players of the European process. But the more the crisis affects them, the more they think largely in national terms. From the perspective of Berlin or Paris, there should be no systematic Europeanization. Instead, the large states are now promoting informal groupings to look for worldwide solutions.Overtones of the 1930’s are amplified, clearly exposing the Union’s predicament, because of an odd coincidence: the Czech Republic now holds the EU’s rotating presidency. The Czechs, probably the people with the most vivid historical memory of the bad regionalism of the 1930’s, succeeded France, the European country that today is the least constrained in asserting its national interest. The clash of two visions of Europe is eroding the political stability of an area that once represented the best model and greatest hope for benign regionalism.
FOCUS WORDS
| resort to | обращаться за помощью к, прибегать к |
| extension | расширение, продолжение, удлинение, распространение |
| vulnerable | уязвимый, ранимый |
| substantial | существенный, значительный, важный |
| benevolent | благотворительный, доброжелательный |
| stymie | загнать в угол, ставить в тупик, безвыходное положение |
| combat | вести бой, сражаться, бороться |
| capacity | вместимость, мощность, способность, объем |
| promote | способствовать, поощрять, продвигать, стимулировать |
| amplify | увеличивать, расширять; усиливать |
PREPOSITIONS
- resort to
- in response to
- demands for
- answer to
- suffer from
- relative to
- owing to
- benefit from
- deal with
- restrict to
FLASHCARDS
SYNONYMS
VOCABULARY TEST
MATCH THE WORD WITH ITS TRANSLATION
| resort to | вести бой, сражаться, бороться |
| extension | увеличивать, расширять; усиливать |
| vulnerable | способствовать, поощрять, продвигать, стимулировать |
| substantial | вместимость, мощность, способность, объем |
| benevolent | расширение, продолжение, удлинение, распространение |
| stymie | обращаться за помощью к, прибегать к |
| combat | загнать в угол, ставить в тупик, безвыходное положение |
| capacity | существенный, значительный, важный |
| promote | благотворительный, доброжелательный |
| amplify | уязвимый, ранимый |
MATCH THE WORD WITH ITS DEFINITION
| resort to | of a considerable size or value, having wealth or importance, sufficient and nourishing |
| extension | to block or prevent from proceeding or going forward |
| vulnerable | to make larger, greater, or stronger |
| substantial | to have recourse for use, help, or accomplishing something, often as a final available option or resource |
| benevolent | the maximum amount or number that can be contained;volume; the power or ability of the mind; mental ability, ability to perform, yield, or withstand |
| stymie | encourage; to advance in rank or position; to aid in organizing |
| combat | capable of being wounded or hurt physically or emotionally; open to or defenseless against criticism or moral attack; open to assault; difficult to defend |
| capacity | to fight or contend against; oppose vigorously |
| promote | an act or instance of extending, lengthening, stretching out, or enlarging the scope of something |
| amplify | characterized by or expressing goodwill or kindly feelings; intended for benefits rather than profit |
MATCH THE WORD WITH ITS SYNONYMS
| resort to | impede, obstruct, hamper, block |
| extension | considerable, ample, abundant, plentiful, sizable, large-scale, consequential, important |
| vulnerable | ability, capacity, skill, aptitude, facility, competence, faculty, capability, potential, inclination |
| substantial | enlarge, extend, increase, intensify, raise, expand , magnify, inflate, enlarge, augment |
| benevolent | lengthening, enlargement, prolonging, augmentation, expansion, increase, protraction |
| stymie | material, physical, substantial, touchable, concrete, visible, observable |
| combat | oppose, resist, contend with, do battle with, counter |
| capacity | recourse, recur |
| promote | generous, altruistic, kindly, charitable, beneficent, compassionate, sympathetic |
| amplify | unprotected, defenseless, exposed, susceptible, sensitive, liable |
MATCH THE WORD WITH ITS COLLOCATIONS
| resort to | patients/ groups/ to disasters/ position/ areas |
| extension | protests/ access/ the career |
| vulnerable | smile/ alumni/ attitude/ institution |
| substantial | from assistant/ to CEO/ wellbeing/ the development/ economic development/ awareness/ understanding |
| benevolent | mortgage/ apply for/ a project/ of the deadline/ of six weeks |
| stymie | limited/ restricted/ mental/ emotional/ to learn/ improve |
| combat | creativity/ energy/ positive attitudes/ enrollment |
| capacity | crime/ problem/ pollution/ inflation/ terrorism/ unimployment |
| promote | to measures/ to violence/ to dirty tricks |
| amplify | amount/ quantity/ decrease/ profits/ impact/ losses |
PREPOSITIONS
- resort ___
- ___ response ___
- demands ___
- answer ___
- suffer ___
- relative ___
- owing ___
- benefit ___
- deal ___
- restrict ___
VOCABULARY NOTES
| resort to прибегать, обращаться | definition to have recourse for use, help, or accomplishing something, often as a final available option or resource synonyms recourse, recur collocations to resort to warresort to [drastic, emergency] measures resort to [violence, killing] (without) resorting to dirty [tricks, play] |
| extension расширение, продолжение, удлинение, распространение | definition an act or instance of extending, lengthening, stretching out, or enlarging the scope of something synonyms lengthening, enlargement, prolonging, augmentation, expansion, increase, protraction collocations a [loan, credit, payment, mortgage] extension [asked, applied] for a [loan] extension [an assignment, an essay, a project, a homework] extension an extension of the deadline an extension of six [weeks, months, days] the [bank, government] has [granted, approved] an extension |
| vulnerable уязвимый, ранимый | definition capable of being wounded or hurt physically or emotionally; open to or defenseless against criticism or moral attack; open to assault; difficult to defend synonyms unprotected, defenseless, exposed, susceptible, sensitive, liable, subject collocations vulnerable [patients, residents, families, children] vulnerable [groups, sections, areas, property] are vulnerable to [floods, disasters, attacks] have been left vulnerable by the [decision, storm] found themselves in a vulnerable [position, situation] have become [increasingly] vulnerable amongst the most vulnerable areas the most vulnerable in [society, the area] |
| substantial существенный, значительный, важный | definition of a considerable size or value, having wealth or importance, sufficient and nourishing synonyms considerable, ample, abundant, plentiful, sizable, large-scale, consequential, important collocations a substantial [number, amount, quantity] (of) has a substantial amount of [food, money, ammunition] a substantial [decrease, fall, growth, rise] (in) a substantial [decrease] in [interest, profits, price, value] the [army, enemy, forces] suffered substantial losses the [market, company, organization] reported substantial [profits, losses] is substantial in terms of [size, number, impact] is substantial [against, compared to] |
| benevolent благотворительный, доброжелательный | definition characterized by or expressing goodwill or kindly feelings; intended for benefits rather than profit synonyms generous, altruistic, kindly, charitable, beneficent, compassionate, sympathetic collocations a benevolent smile gifts from benevolent alumnia benevolent attitude a benevolent institution |
| stymie загнать в угол, ставить в тупик, безвыходное положение | definition to block or prevent from proceeding or going forward synonyms impede, obstruct, hamper, block collocations stymie growing protests stymie access stymie the career |
| combat вести бой, сражаться, бороться | definition to fight or contend against;oppose vigorously synonyms oppose, resist, contend with, do battle with, counter collocations combat crime, problem, drug, pollution, inflation, terrorism, threat, unimployment, abuse, desease, effects, racism |
| capacity вместимость, мощность, способность, объем | definition the maximum amount or number that can be contained;volume; the power or ability of the mind; mental ability, ability to perform, yield, or withstand synonyms ability, capacity, skill, aptitude, facility, competence, faculty, capability, potential, inclination collocations a maximum capacity of [40,000] [people, guests] the capacity is [limited, restricted] to [40,000] the capacity has been [extended, boosted, increased] to is full to capacity is at full capacity has the capacity to [provide, meet, produce, make] [mental, emotional, cognitive] capacities the [child’s, student’s] capacity to [learn, improve] |
| promote способствовать, поощрять, продвигать, стимулировать | definition encourage; to advance in rank or position; to aid in organizing synonyms material, physical, substantial, touchable, concrete, visible, observable collocations promoted from [assistant, manager] promoted to [manager, CEO] promote (good) health (and wellbeing) promote a [positive, healthy, better] promote the [development, interests, growth, health] of promote economic [growth, development] (in)promote [awareness, understanding, acceptance, openness] promote [the event, a concert, his movie] |
| amplify увеличивать, расширять; усиливать | definition to make larger, greater, or stronger synonyms enlarge, extend, increase, intensify, raise, expand , magnify, inflate, enlarge, augment collocations amplify creativity, energy, positive attitudes, enrollment |