The Prospector

WEEKLY INSIGHTS: TUESDAY, 10 OCTOBER 2017

October 10, 2017

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Your weekly digest of foreign policy commentary:

Reading Time: 2 min read

Wolfgang Münchau of the FT argues that Catalonia is economically unprepared for independence. Image credit – bloodua / depositphotos

ASIA COMMENTARY

 

Beyond Business as Usual: on India and the EU by Constantino Xavier, Research Fellow at Carnegie India, Carnegie Endowment for International Peace

With the U.S. reducing its global footprint and China moving in to fill the vacuum, this is the right time for New Delhi and Brussels to join hands in defence of the liberal order.

  • Constantino Xavier observes that India and the European Union (EU) could partner to support the liberal order that is under pressure due to US isolationist policies.
    • Brussels and Delhi could promote a rules-based multilateralism and address security challenges with “respect for international law and cooperation among democratic states.”
    • To that end, India should open its economy to European goods, services, and investments, and advance security cooperation with Europe.
      • For example, India could lend its military for the United Nations’ naval escort missions in the Indian Ocean region, which are coordinated by the EU.
    • In addition, the EU should recognise its ideological commonalities with India and promote bilateral relations beyond economic interests.

GLOBAL COMMENTARY

 

A Catalan Breakaway Would Be Worse Than Brexit by Wolfgang Münchau, Associate Editor of the Financial Times

The main argument against independence is economic. Independence would constitute a shock … larger than the hardest of Brexits.

  • Wolfgang Münchau writes that Catalonia is economically unprepared for independence, observing that such an event would necessarily precipitate a “Catalexit” from the EU and the World Trade Organisation (WTO).
    • With independence, Catalonia would lose its Spanish ‘citizenship’ and thereby both its European citizenship and WTO member status.
      • It is unlikely that Catalonia would be able to maintain any type of association with Spain that would allow it to benefit from reduced WTO tariffs.
    • The immediate exit from Europe could trigger another eurozone crisis and cause the region’s banking system to collapse.
    • Catalonia lacks a central banking infrastructure and would not be able to introduce its own currency on independence day.

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