Dr Sebastian Krapohl, Assistant Professor of International Relations at the University of Bamberg, Germany
24 Jul 2012
SR 501, Level 5, NTU@one-north campus,Executive Centre 11 Slim Barracks Rise (off North Buona Vista Road), Singapore 138664
3.30 – 5 pm
About the speaker
Dr Sebastian Krapohl is Assistant Professor of International Relations at the University of Bamberg. He has studied, researched and taught Political Science at the Otto-Friedrich-University of Bamberg (Germany), the London School of Economics and Political Science (United Kingdom), the European University Institute in Florence (Italy), the University of Tirana (Albania), the Zeppelin University in Friedrichshafen (Germany) and the University of Mannheim (Germany). He received his Master’s Degree in 2001 at the London School of Economics and was awarded his Doctoral Degree in 2008 at the University of Bamberg. He is author of the book Risk Regulation in the Single Market: The Governance of Pharmaceuticals and Foodstuffs in the European Union (Palgrave, 2008) and several academic articles, published among others in the Journal of European Public Policy, the European Journal of Political Research, the European Law Journal and theGerman Political Science Quarterly. His current research project deals with regional integration outside of Europe, comparing the Association of South East Asian Nations (ASEAN), the Southern Common Market (MERCOSUR) and the Southern African Development Community (SADC).
One of the results of the recent spate of financial crises is the establishment of regional liquidity mechanisms to contain them. The current eurozone crisis is the most recent of regional financial crises that have in recent years struck East Asia (1998) and South America (2001), demonstrating that such crises are not just a phenomenon of the developing or less industrialised world. Dr Krapohl sought to explain the variance in levels of cooperation and the different solutions offered ranging from the Chiang Mai Initiative of the ASEAN+3 to the European Financial Stability Fund in the EU.
Dr Krapohl presented models showing the changing contours of economic interdependence in the three regions represented by the three regional institutions – the EU, ASEAN + 3 and MERCOSUR. He speculated that MERCOSUR members did not come out with a regional mechanism to offer support to Argentina during the peso crisis because extra-regional trade was more dominant compared to interregional trade among dominant or hegemonic MERCOSUR members. Furthermore, production networks and interregional FDI are less important than in ASEAN+3. In contrast, intraregional trade is dominant in the EU, with 70 per cent of trade between the member states being intra-EU. The common currency and financial linkages between European banks further strengthen economic interdependence among eurozone members. Therefore the larger EU member states have an interest in the economic well-being of their neighbours so as not to endanger their own export markets, banks and the common currency.
Different degrees of economic embededness in the different regions explain the variance in regional mechanisms to deal with financial crises, and the interests of regional powers are shaped by their economic embededness in their respective regions. The more embedded a country is in its region, the more incentive it has to stabilise it. For example, Brazil relies more on external markets and is not as economically integrated with its MERCOSUR partners and hence does not see the need to establish or contribute to any regional liquidity fund. The presentation also revealed that regional hegemony by one power is not necessary to achieve regional cooperation. Competing for influence, in the case of China and Japan in the ASEAN+3, and high levels of institutional cooperation, in the case of France and Germany in the eurozone, have a decisive influence on the success of regional financial cooperation.