The debate about Europe’s future role and place in a globalised economy is heating up – among policymakers, concerned citizens, in boardrooms and in the media. As international trade intensifies and new players are entering the scene, the world seems to have reached a new stage of economic integration. Globalisation describes a process of increased interdependency of national economies: markets for goods and services, but also markets for labour and capital are integrated on an international scale. Whereas economists tell us that this integration through trade will lead to an overall increase in welfare in the long term, policy makers and citizens are concerned about shortterm, negative effects, about those losing out from intensified competition on integrated world markets.

A well-functioning financial services industry is vital for the competitiveness of the European economy. Easy access to capital is a pre-condition for the growth of new and innovative businesses, which the EU needs if it is to keep pace with the economies of America, China and India. The integration of European financial markets would also make the EU’s creaking pension systems more sustainable by encouraging people to invest in equity-based private pension funds. Crucially, the integration of Europe’s banking sectors would do much to deepen European economic integration. Only once it is possible to run a business across Europe as easily as in a single country, or for consumers to purchase goods and services from suppliers in another member-state through a single bank account, will the full potential of the single market and the euro be realised.

At the launch of a public consultation on the EU budget last month, Commission president Barroso explained the need to reform the budget in terms of a need to “focus EU spending on the right areas”. But have we not heard this before? The past 20 years have seen a series of unsuccessful attempts to reform the EU budget. Despite a growing consensus that the budget does not correspond to the realities of the EU, it has proved extremely difficult to reach a political agreement among the member states on how to improve it.

In a wide-ranging annual report into the EU’s labour markets, countries are urged to develop more flexible labour markets while ensuring basic rights for workers and strong social security systems.

Two critical trade programs, the Generalized System of Preferences and the Andean Trade Preference Act, are set to expire at the end of 2006. These trade programs make important contributions to the economies of the countries that they favor and bring benefits to American businesses and consumers.

More social spending by EU governments is not the best way to reduce inequalities, and can have unintended consequences, says Jan Krzysztof Bielecki, a former Prime Minister of Poland. He argues that the fastest route to cohesion both between and within member states is freer movement of people, capital and services.

In March 2000, the European Union proudly announced that it would become the most dynamic and competitive knowledge-based economy in the world by 2010, with full employment and 3 percent yearly growth.1 By 2005 however, it was forced to acknowledge dismal failure,2 with poor projected growth rates and negligible reductions in unemployment. Presently, there is little evidence that the European economy will either outperform the American economy by 2010 or even produce substantial improvements on its current record.

The 50th anniversary of the Treaty of Rome, which established the European Economic Community, will take place the week after next. There is no other case where a group of sovereign states has delegated such significant prerogatives to a transnational entity. That an undertaking of this sort has survived for 50 years is remarkable enough. But, in addition, what started as a club of six members now has 27, which is again an external indicator of success. So deeply embedded is it in Europe’s collective consciousness that it is hard to imagine that the European Union (EU) will not still be here when the time comes for its centennial.

The EU throws a party in Berlin this weekend for its half-century birthday, and the economy is something worth celebrating for a change. The leaders in attendance need only look around to see why: A rebound in the host country, long the European laggard, is bringing the rest of the bloc up along with it.

Since the 1960s, relations between the EU and India have developed rapidly. Nowadays, EU–India relations have a strong institutional architecture, including regular summits (political and commercial), meetings of ministers and senior officials and so on. Within this institutional framework, the EU and India have launched a comprehensive and fruitful cooperation. There is much active political collaboration, such as in the reform of the United Nations and the fight against terrorism, based on common values. Trade and investment between the EU and India are experiencing strong growth but lack symmetry.