A European Policy Agenda in and for the New Global Economy

Abstract

After almost thirty years of hyper-globalization, the global economic integration process has plateaued after the global financial crisis of 2008/09. However, this article argues that it is premature to announce globalization’s death. Rather, it posits that globalization is changing its character. Key features of the “new global economy” explored are: digitalization, the rise of superstar firms, the rise of emerging economies, and the changing geography of global finance. At the same time, the distributional consequences of both hyper-globalization of the past and the key structures of the new global economy have the potential of undermining political support of globalization and have been linked to the rise in populism in advanced countries. Taking into account the political challenges emanating from globalization, the article finishes by discussing policy options for the European Union. It argues, that is not enough to address the economic and distributional issues efficiently, but that is also urgent to rebalance and democratize EU governance to give Europe the legitimization and, hence, the credibility to act globally in support of a just and stable global economy.