The influence of the European socio-economic model in the global economy

Abstract

The EU is a major player in the global economy, due not only to its weight in international trade, foreign direct investment and exchange rate mechanisms, but also to its capacity to influence global standard formation through its single market and its Economic and Monetary Union. In addition, a further more diffuse form of influence stems from the sum of its external policies, as well as from the model provided by its internal socio-economic model. This prominent position poses the question of the extent to which these vectors of influence have been adapted to the new landscape defined by globalisation. First, this chapter starts with a preliminary characterisation of the European economic and social model, and with the challenges arising from a globalised economy. Second, it details the evolution of the Lisbon Strategy (2000-10), the modernisation agenda aimed at preparing Europe for the challenges of globalisation, as well as its implications for the Union's external action. The Lisbon Strategy, adopted by the European Council in 2000, was designed to address the question of whether it is possible to update Europe's development strategy so that it might rise to the new challenges resulting from globalisation, technological change and population ageing, while still preserving European values. A further core question which emerged was the need to identify under which conditions a win-win game could be fostered at the international level. In other words, the question is how to create global players engaged in a race to the top - not the bottom - with regard to the social and environmental conditions of a transition to a knowledge-intensive economy. What could the specific role of the EU be in this process of international convergence? This chapter argues that the EU can play a very relevant role in spreading a new development agenda through a variety of means: by providing a positive example in implementing a new development agenda, in line with the Lisbon Agenda, in its own member states; by intertwining this new development agenda with its enlargement and neighbourhood policies; and by connecting this new development agenda in the various components of its external action: its cooperation policy; the external projection of its internal policies; its trade policy and foreign policy regarding third countries, other macro-regions and multilateral organisations.