Ahearne, Alan Pisani-Ferry, Jean Sapir, André Véron, Nicolas
Year of Publication:
Bruegel Working Paper No. 2006/02
The system of multilateral rules and institutions that constitutes the global economic governance regime trails the rapid transformation of the world economy and the rise of pressing global issues. It faces significant challenges such as the resurgence of economic nationalism. It needs to adapt to changes in the geopolitical background and to a growing number and diversity of participants in global economic integration. It must learn to coexist with regionalism and the market-led governance. It is possible for globalisation to proceed with weak global governance, but not without significant risks to its sustainability. The EU, which has a stake in the multilateral system and most likely a comparative advantage in institutional design, should be a key player in its reform agenda. The difficulty of the task is no excuse for avoiding it and for hiding behind US leadership. To equip itself with the ability to take initiatives towards reform, the EU requires changes in its own internal governance and its external representation. Contrary to conventional wisdom, these changes need not imply a federalisation of external relations.