The Eurozone Crisis: The Realities, Myths and Lessons for the East African Community Integration Process

Abstract

This paper synthesizes and distills some literature regarding the evolution of the EU and the Eurozone crisis in particular, providing insights that could appraise the structure and convergence of the EAC. Interest in regional integration in Africa has accelerated recently, reflecting a renewed political will for a more cohesive continent, or simply the desire to cash in on the benefits of expanded regional markets. On January 1, 1999 eleven European countries decided to denominate their currencies into a single currency, the Euro. 15 years on, the Eurozone is in deep financial crisis and what seemed like a mere aftershock of 2007/08 global financial crisis is turning out to be a systematic exposure of the major weaknesses within the integrative framework of the EU. Key issues raised by analysts include the core objective of unification, antagonistic monetary policy stances and tools, exogenous shocks such as the global financial crisis among other factors. Key lessons have been raised from the EU experience to appraise the EAC integration process and these include establishment of robust institutions, research as well as clarification and unanimous embracing of the core integration objectives and agenda. Whether the events in the Eurozone are related directly or not to the integration process, the role of the structure and the responses to the crisis offer invaluable lessons and insights for posterity. The EAC decision making organs need to take cognizance of these lessons, learn from the mistakes of the failed EAC and establish well informed, unified institutions that will not just give good form to the Union but also confer global competitiveness to the Community in light of the current and future challenges. Success can be planned and pursued and as such, the fate of the Community should not be left in the hands of uncertain, random future events and outcomes.