Asia shows its displeasure with Europe

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The Independent Online
IN a country where it is still customary to apologise after someone treads on your foot, ranting is not a highly developed art. Japan's bureaucrats are masters of the veiled utterance and indirect criticism. The strongest word in the diplomatic vocabulary is "regrettable".

So it is a measure of how grumpy she must have felt that a Japanese diplomat, in her official capacity, recently had this to say about Europe's response to the Asian economic crisis: "European countries have been free-riders on Asia's economic success, but unwilling to share responsibility for helping it out."

Asia's ill humour will be on show in London this week at the second Asia- Europe Meeting (Asem 2). Tony Blair is hosting two days of talks among10 Asian leaders and the 15 heads of the European Union, plus Jacques Santer of the European Commission. They will discuss the battle against drugs, money laundering and child prostitution, but the central subject will be the Asian economic crisis.

Asia says Europe has done less than any other region of the developed world to remedy the problem of the currency contagion which laid low half of South-East Asia. Of sums promised to the International Monetary Fund to bail out Thailand, South Korea and Indonesia, Japan has promised $19bn (pounds 11.66bn) and the US $8bn. The EU has stumped up $6.2bn. "Europe should contribute more in efforts to deal with the problem," said an Indonesian diplomat.

The Europeans dispute this, pointing to contributions individual union members make in subscriptions to the IMF. None the less, there are initiatives to be unveiled at Asem 2 which, it is hoped, will deflect such criticism. Britain's idea is for a trust fund, administered by the World Bank, which would dispatch experts to help out troubled economies. Its value would be pounds 5m, tiny compared with the billions being dispensed by the IMF.

Two years ago, when the first Asem meeting took place, in Bangkok, both sides had their reasons for wanting it to work. If world trade is seen as a triangle, with the US, Europe and Asia as its points, the lines linking the last two are by far the weakest. The Asians were keen to develop the relationship. And the Europeans wanted to catch up with the US in the scramble for a share of the Asian economic "miracle" - a phrase unlikely to be heard at Asem 2.

A big question hangs over European banks which lent freely in South Korea and Indonesia and stand to lose their loans if those economies go further down the drain. European manufacturers are threatened by the plunge in Asia's currencies which will make its exports irresistibly cheap. The EU's approach will be to insist once again that the IMF supervise Asia's recovery, but there is no sign that European leaders will take any big initiative. Saving Asia is costly, complicated and diplomatically tricky, and there are few votes in it back home. However grumpy his guests, Mr Blair can be secure knowing that they need him far more than he needs them.