Emergent global challenges: What Europe needs to do to tackle the triple crises of tax, finance and climate

This paper considers how globalization has changed the nature of risks we are facing. It shows how, at the same time as idiosyncratic risks have fallen, the threat of system wide risks has risen significantly. This has been accompanied by an ever increasing degree of externalities and faster and larger cross border flows of not just commerce but people, information technologies and pathogens. While the increase in cross border flows has generated new opportunities, it has also exposed us to new threats. This calls for new institutional structures and a new approach to global governance. The European Union should, as the most integrated region in the world, take the lead in both taking these emergent challenges head on and developing a model for new governance that can be replicated at the global level. This would be beneficial for Europe, and for the world. In the second part, this paper lays out specific short to medium term measures that Europe must take in order to tackle the triple fiscal, financial and climate crises confronting the world. This would not only help Europe emerge stronger and more integrated but would also allow the Union to take the lead in global affairs.

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