The mood of complacency in the European Union (EU) is driven largely by the recovery in France and Germany and the imminent launch of economic and monetary union. But two【51】recent developments challenge the notion【52】the EU can remain immune from the shocks occurring around emerging markets. The first phenomenon is that the financial【53】are occurring simultaneously and in many instances are mutually reinforcing. Contagion is no longer a【54】 it is a fact of life. The erosion of market confidence【55】with a second phenomenon: the emergence of a political【56】in Moscow, Tokyo, Washington, and Bonn. The EU and【57】15 member states have contributed generously through IMF packages and technical aids to strengthen domestic banking supervision in Asia. But【58】the highest level, EU leaders have shown themselves driven by domestic political【59】All the difficult negotiations over EU enlargement,【60】, were put off until after the German election in Sept ember. (31)