Macroscope | Why Asia, too, mourns Brexit and the end of the European dream

Asia has sought in vain for a euro-style regional currency to challenge the US dollar since the 1997 financial crisis. The euro, for all its faults, is still the only currency capable of opposing dollar tyranny. But now, with a weakened EU, even that dream is fading

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An EU supporter displays a card in London on January 31, when Britain officially left the union. Photo: EPA-EFE

Published: 1:00am, 10 Feb 2020Updated: 1:00am, 10 Feb 2020

It would be difficult to match the eloquence of columnist Roger Cohen’s moving “Requiem for a Dream” published in The New York Times last month. The apparent end of that dream signalled by Britain’s departure from the European Union is something to be mourned in Asia as well as Europe.

This is true in the economic and monetary as much as in the political sense – perhaps even more so. There was a time not so very long ago when the EU was seen as model for future East Asian economic integration and the euro (even minus the pound) looked like a way to end US dollar hegemony.

Then came the 2016 Brexit referendum and, with Britain voting to pull out of the EU, rather than just stay outside the euro, Asia began to lose faith in the dream.

We are all familiar by now with the argument that the euro was not a good idea and that it deprived members of the EU, especially those such as Greece and Italy in southern Europe, of the freedom to devalue their currencies to restore export growth and economic recovery.

We are also familiar with the view that the euro zone is in effect a kind of Deutsch mark bloc, where a strong currency best serves the interests of a competitive Germany. There is some truth to such arguments but the other side of the coin is that there is a strong case for a single currency.