Tuesday, June 23, 2015

The EU integration project and its influence in Latin America

Because of the debt negotiations between the EU, IMF and Greece, it seems the chance of EU project breaking apart goes higher than the expected. The discussion of the EU model ability to address the challenges arising from within and from outside its borders, should take into account how strong has been the influence of this integration project around the world. It is not just the survival of the EU what it counts, but the fact that in many places in the world, especially in Latin America, the EU model ,is a path to follow for future trade flows and economic growth to become stronger, cultural ties to become part of common history, and social constraint such unemployment , poverty, and inequality to be properly solved . Integration has long been a complex process in Latin America countries full of expectations, but short of solutions. The experience in the sixties (Ecuador, Peru Chile, Colombia), did not get what it was expected, because it was wrapped by the rhetoric related to the confrontation North - South , and the argument of countries in the periphery lacking development because of industrialized economies from the north, exploit its raw material endowment at low cost . Thus, the orientation of such a process, on the one side, had a bias toward foreign investment, free markets policies, and on the other the conviction that a Strong state was part of the solution, to take the lead of economic development and social improvements. The outcome, was less promising, the external debt crisis of the eighties make it all a huge failure, with inflation, poverty and inequality worse than at the beginning of the experience. Those years, between 1980 and 1990, were considered the “lost decade”. But the “lost decade” concept real meaning and implications, was deeper for the integration dream. Tough questions arose at that time about the next step to confront the unsolved issues of inequality, poverty low rates of economic progress, and lack of institutional framework to deal with the dynamic of development. The EU integration path under way at that time,was the benchmark to follow. So, it came about different initiatives based upon the premise that trade and investment flows, work better through economic integration.