Toughen Up for ‚Big 3′: What are Europe’s Top Three Challenges?

Written by | Tuesday, July 23rd, 2019

If not Brexit, migration, or populism, what are Europe’s three biggest challenges? It’s not that these issues do not matter, but the attention devoted to them is all out of proportion. Meanwhile, three changes are going to upend the way we work and live and revolutionize the relationship between the state and the individual. These are climate change, aging populations, and digital revolutions—the “Big 3”.

Their effects are going to require Europeans to adapt in ways that we are only beginning to understand. The Big 3 will also have a domino effect. For example, if climate change makes parts of Europe uninhabitable, or if automation causes upheaval in labor markets, migration both within and into Europe will likely go up. The EU needs to do all it can to manage the transitions, which have already begun.

Out of the three, the EU has devoted the most attention to climate change, and with some success. But we argue that the current approach—essentially “greening” the current economic model—will not work. Even if wealthier societies ditch single-use plastics, for example, they cannot keep growing without creating an unsustainable impact on the environment. Europeans should focus on well-being instead of growth, primarily by using fewer but higher-quality products and getting more mileage out of them. Reducing consumption is essential to building a sustainable, low-carbon economy. And one way the EU could ease this transition is also to lead an overhaul of the tax system.

The demographic change is going to be tough to tackle. Barring a large inflow of migrants—which many European voters have repeatedly shown they do not want—safety nets will run out of money. This is because the number of working-age people, who pay into the schemes, will shrink relative to the number of retirement-age people. Also, robots will take many jobs currently performed by humans, further eroding tax revenue. People will likely need to work later in their lives and continually re-educate themselves to gain new skills that suit a changing labor market. Each country will be affected differently and that is why the EU has a vital role to play, for example, by developing a common energy market and capping resource use. It could also pay into and accredit nonstandard education methods, such as online learning, and possibly create EU-wide unemployment funds.

Lastly, the EU is no slouch when it comes to addressing technological challenges. For example, it has already passed a directive requiring more stringent safety standards for critical IT networks. But the measure is not enough. Further steps are needed to make sure companies comply, such as financial penalties for lax security. The EU must also raise public awareness about digital safety, such as through early education and an EU-wide labeling system on product security. It could also help ensure that safeguards are built into the design of artificial intelligence technologies and could help define and dismantle harmful online content.

There are many obstacles along the way to tackle these challenges facing Europe but the encouraging bit is that at the national and local levels, many possible solutions to the Big 3 are being tested and implemented. The EU and national governments need to literally watch, listen, and learn. Fortunately, the EU has a few comparative advantages, in comparison with, for example, the US and China. The standards it sets for the EU’s large internal market of $20 trillion tend to get adopted by other economies trading with it. It also has a history of setting rules that serve the public interest because no single country controls them, which adds to Europe’s global credibility.

‚What Are Europe’s Top Three Challenges? Not Brexit, Not Migration, Not Populism.‘ – Opinion by Tomas Valasek – Carnegie Europe.

(The Opinion can be downloaded here)


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