Europe and Global Economic Governance. College of Europe EU Diplomacy Paper 2/2008, February 2008

Padoan, Pier-Carlo. (2008) Europe and Global Economic Governance. College of Europe EU Diplomacy Paper 2/2008, February 2008.

Abstract

All long-term scenarios confirm that over the next fifteen to twenty years, Europe’s relative economic weight will shrink as that of new emerging economies – Brazil, Russia, India, and China (the so-called BRICS) – rises. On the one hand, this is a positive development insofar as it adds new engines to world growth, but on the other hand, imbalances are now appearing in energy markets, environmental sustainability, and financial stability. One of the major consequences of globalization is the growing interconnection among markets and, consequently, the growing interdependence of the four main international economic policies: in trade, in competition, in the supervision and regulation of international financial markets, and in monetary relations. With the exception of Europe, leading players of the global system are sovereign states, including the BRICS, for which the policy coordination issue arises only in terms of national interest and national institutions. However, the EU’s external economic policy still bears a problem of dysfunctional governance. If this issue is not addressed properly, an unavoidable consequence is a loss of European influence over the management of international economic relations.