Past Event

Trends of the 21st century global economy and implications for Europe

Does the EU have all the necessary tools to deal with the trends of 21st century in global economy?

Date: October 26, 2016, 12:30 pm Global Economics & GovernanceInnovation & Competition Policy Tags & Topics

summary

SEE BELOW FOR THE VIDEO, AUDIO AND EVENT MATERIALS

 At this event the main trends and challenges at the global and EU level have been outlined by the panelists. Mikhail Fridman recalled that the main global challenges in the past used to be related to energy resources, implying the need for conquering and defending territories. This idea is today steadily disappearing and the developed world is moving towards the exploitation of intellectual capacity. It is striking to look at the sector in which the top companies by market capitalization operate: the power of technologies outpaced that of natural resources. This applies also to emerging markets: as far as infrastructure and resource exploitation was concerned, China, for instance, performed well thanks to a centralized system. This principle, however, does not apply to intellectual and social capital which require a long-standing development of rule of law, competition rights, intellectual property rights and so on.

Marco Buti looked back at the main expectations 20 years about future economic developments: a globalization of capital rather than labor; a skill-biased technological progress that would have displaced unskilled workers; the faith in multilateral solutions; the assumption that sharing (especially monetary) sovereignty would have brought convergence of social preferences and mutual trust; and that an inclusive welfare model in the EU would have protected from inequality. However, the actual developments have shown to be quite different. The globalization of people is now more pressing than that of capital. Globalization and technological change have negatively impacted mostly the middle class, and this trend will be accentuated even more by recent advancements in robotics. The current populist tendency is indeed addressing the median voter and her malcontent. Multilateral solutions and sharing sovereignty can be disputed since the recent economic crisis, as does the EU welfare model. According to him, six are now the main trends: low productivity growth, demographic transition, new innovation patterns, rising inequality, risk of fragmentation and widespread lack of trust. Looking at the governance levels, there are three main sets of responsibilities: the pre-market level (i.e. the endowments/resources), the market liberalization or integration and the post-market level, embodied by the tax and welfare system. Currently, only the second one is an EU prerogative, while the other two are up to National States. According to MB, this distinction of levels is not politically sustainable in the long term, and a rethinking of the responsibilities is needed.
Christian Kastrop contended whether the EU is fit for the megatrends of this century. Macro policies have become more supportive, but demand is still weak, unemployment high, financing for firms is still a problem, the barriers to intra-EU mobility remain too high and the level of investment is still below pre-crisis levels. GDP gains from EU structural reforms can be large, but more of them are needed, as well as a proper Digital Single Market to unleash the potential of the Industry 4.0 and a single market for services. Aggregate demand is weak as does the gross capital formation, while non-performing loans are still too high, hampering demand. Public investment cuts are needed, but there is a quality issue in selecting them. Regulatory burdens are still too high in Europe, e-commerce remains mostly domestic and the ICT capital stock gap with the US is still persistent. The quality of impact assessment and of ex-post evaluation should be increased, as well as the recognition of professional qualification in order to increase labor mobility, also for migrants.

Event Notes by Enrico Nano

Video and audio recordings


 

event materials

Perspectives of the world economy in the era of unprecedented çartindividual creativity – The Jerusalem Post 05/18/2016

Searching for growth in an unstable global-economy -The Milken Institute Review

Schedule

Oct 26, 2016

12:30-13:00

Check-in and lunch

13:00-13:45

Panel discussion

Chair: Maria Demertzis, Deputy Director

Marco Buti, Director-General, European Commission, DG ECFIN

Mikhail Fridman, Chairman, LetterOne

Christian Kastrop, Director of the Policy Studies Branch at the Economics Department , OECD.

13:45-14:30

Audience Q&A

14:30

End

Speakers

buti-picture

Marco Buti

Director-General, European Commission, DG ECFIN

MariaDemertzis1 bw

Maria Demertzis

Deputy Director

fridman-picture

Mikhail Fridman

Chairman, LetterOne

21 March 2014-Christian Kastrop, Director, ECO/PSB, OECD. Portrait/Headshot.
OECD, Paris, France.
Photo; OECD/Michael Dean.

Christian Kastrop

Director of the Policy Studies Branch at the Economics Department , OECD.

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevón

Matilda Sevón

matilda.sevon@bruegel.org +32 2 227 4212

Read about event More on this topic

Upcoming Event

Jan
19
12:30

Implications of the new US trade policy by the incoming president Trump

An event about the implications of Donald Trump's emerging trade agenda on global trade.

Speakers: Adam Posen, André Sapir and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Jan
24
12:30

The future of EU trade policy

We are happy to welcome the European Commissioner for Trade Cecilia Malmström to Bruegel on 24 January to talk about the future of the EU's trade policy.

Speakers: Cecilia Malmström and André Sapir Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Jan
26
13:00

Achieving inclusive growth: what have we learnt?

Inclusive growth has been the exception globally, and will be a greater challenge in the future. Achieving it has to be central to our agenda, but requires rethinking and reprioritisation.

Speakers: Tharman Shanmugaratnam and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Feb
1
12:30

State Aid and Tax Rulings

When do national tax rulings violate EU state aid rules? Does the European Commission's approach raise concerns about Member State Sovereignity and what is the impact on corporate investments in Europe?

Speakers: Clemens Fuest, Damien Neven, Gert-Jan Koopman, Nicole Robins and Guntram B. Wolff Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Upcoming Event

Feb
9
12:30

Financing the Belt and Road Initiative

The Belt and Road initiative, recently embarked on by China, aims to improve cross-border infrastructure in order to reduce transportation costs across a massive geographical area between China and Europe.

Speakers: Alicia García-Herrero, Mingxi Sun and Jianwei Xu Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

Guntram B. Wolff

Manufacturing in the US: Will Trump’s strategy repatriate highly-paid jobs?

Trump has set out a plan to repatriate highly-paid manufacturing jobs to the US. But the idea that manufacturing jobs are better paid than service roles is a myth. Moreover, labour markets are slow to shift between sectors. An aggressive trade policy may create some jobs in manufacturing but will not be a benefit to US citizens in general.

By: Guntram B. Wolff Topic: Global Economics & Governance Date: January 6, 2017
Read about event More on this topic

Upcoming Event

Apr
6-7
09:00

Towards EU-MENA shared prosperity

The second edition of the "Platform for Advanced & Emerging Economies Policy Dialogue" will discuss global supply chains, energy and security.

Speakers: Karim El Aynaoui, Larbi Jaidi, Simone Tagliapietra and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

Silvia Merler

The American dream

What’s at stake: historian James Truslow Adams, in his 1931 book The Epic of America, stated that the American dream is "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement”. Few ideas have ever been as powerful as the “American Dream”, and many recent political events hinge on the fear that this “dream” may be dead. Meanwhile, researchers have been trying to measure the reality behind the dream.

By: Silvia Merler Topic: Global Economics & Governance Date: December 19, 2016
Read about event More on this topic

Past Event

Past Event

Environment and economics: opportunities and challenges for Iran

We are pleased to welcome Dr. Masoumeh Ebtekar, Vice President and head of Department of the Environment of Iran to Bruegel on 13 December to have an off-the record discussion about the opportunities and challenges that Iran is about to face in environment and economics.

Speakers: Massoumeh Ebtekar and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 13, 2016
Read article More on this topic More by this author

External Publication

9783319418445

Policy and Politics in the Era of the Industrial Internet: How the Digital Transformation Will Change the Political Arena

The digital transformation has already had an impact on policymaking, and this trend will continue in the years to come. How will the political process change and how can influencers guide this change?

By: Giuseppe Porcaro Topic: Innovation & Competition Policy Date: December 7, 2016
Read article More on this topic

Blog Post

Alicia García-Herrero
DSC_0160

UK-China agreement on trade in services is no substitute for a UK-EU deal

The UK government has high hopes that new trade deals with non-EU states will offer an economic boost after Brexit. But how likely is this to materialise? The authors show that a FTA with China is unlikely to offer much to the UK's prominent services sector. Strong links with the EU will remain vital.

By: Alicia García-Herrero and Jianwei Xu Topic: Global Economics & Governance Date: December 6, 2016
Read article More on this topic More by this author

Opinion

Alicia García-Herrero

Japanese banks and US$ liquidity: Squeezed between expensive deposits and the BoJ

For the last few years, Japanese banks have aggressively expanded their assets overseas, which has helped increased their stubbornly low profitability even after the introduction of negative interest rates by BoJ. Such a successful overseas strategy, profitability-wise, may be at risk due to US$ liquidity developments at a global level.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: November 28, 2016
Load more posts