Open up: why the EU must reform to survive

At the end of the Second World War, the founding fathers of the EU could hardly have anticipated the shared prosperity and peaceful relations between the countries of Europe that have been achieved half a century later. However, Europe now faces a rapidly transforming world, and must reform to reflect changed circumstances: the entry of new countries into the international economy, including emerging giants like China and India as well as the former Soviet bloc; the huge growth of private sector capital flows; intensified global competition. Globalisation is not a threat - or need not be - but an opportunity for Europe and the rest of the world. It is wrong to see the emergence of China and other growing economies as a threat. Capital that flows into these economies does not reduce the incomes of the already industrialised countries, it raises incomes of the developing countries which in turn creates demand for the goods and services produced in developed economies like those in the EU. This paper is the first in a series from the new UK think tank Open Europe looking at how Europe must reform to meet the challenges of tomorrow.