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Globalization, the New Geography of Power, and EU Policy Response


The globalization of the economy of the past two decades has created more challenges than opportunities for the EU. Already at the beginning of this century, the EU started feeling a heavy pressure from emerging economies, which led to a reshuffling of global GDP shares, the polarization of EU job markets and a gradual loss of competitiveness in several industry sectors. The economic downturn since 2008 has just exacerbated this process. Overall, this paper portraits a rather gloomy outlook for Europe’s future role in the global economy: the EU suffers from major weaknesses at home, not least due to lack of political and economic integration and the prevalence of parochial instances in the trade negotiations. Current policy responses in the domain of trade policy, innovation and industrial policy do not seem likely to restore and ensure the EU’s leading role in the global economy.

Paper produced within the framework of the IAI project Transworld.

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