1. NEW ECONOMIC AND GEOPOLITICAL RISKS Risks or Challenges? Ana Palacio XXXI Reunión del Círculo de Economía Sitges, 29 de mayo de 2015

2.  New Relevant Actors: MNCs, NGOs, terrorism  “ New rules or a world without rules ”: Russia, ISIS  The rise of informality and the erosion of rules & institutions: G´s, IFIs  Withdrawal of the United States from the world scene & rise of regional champions  What about the EU? Global Challenges in 2015: The Breakdown of Global Order?

3. EU Internal (1/3) Political  Nostalgia: a recurrent multifaceted phenomenon  Cohesiveness: national perception of the EU usefulness and the risk of unravelling – Brexit and Grexit  Ambition – both lack and excess Economic  Sustainbility – the need for a new model for growth?  Competitiveness: 50-25-7 Legal  “An ever closer Union”: Energy Union and Single Digital Market

4. EU Internal (2/3) Digital Agenda Targets :  Better access to consumers and businesses to online goods and services across Europe  Creating the right conditions for digital networks and services to flourish  Maximising the growth potential for our European Digital Economy What needs to be done?  Harmonisation and adaptation of rules on personal data protection, copyright, online purchasing, EU-VAT, digital innovation, investment and fair competition  Build trust, encourage PMEs and start-ups, affordable parcel delivery, prevent unjustified geo-blocking, cross-border access to digital contents

5. EU Internal (3/3) Energy Union  Energy security, solidarity and trust  A fully integrated European energy market  Energy efficiency contributing to moderation of demand  Decarbonising the economy  Research, Innovation and Competitiveness

6. EU Transatlantic Atlantic Basin : Economic Potential  Bridge to Latin America  Untapped Potential in Africa TTIP  Reinforcing Rules-Based Approach  Maintaining a European Voice NATO  Filling the Credibility Gap

7. EU Neighbourhood The failure of neighbourhood policy:  The Mediterranean  Enclaved Economies  Demographics/Governance  Legal Assistance  The Eastern Partnership  Crumbling Economies  Repressive Regimes  Hollow rule of law

8. From Risks to Challenges? As Europeans, our challenge summarizes in taking ownership of the EU project and making the voice of the EU contribute to the emerging World Order

9. US Infrastructure Development Highlighted Pipeline Reversals and Expansions Accommodating Increased Domestic and Canadian Supply “ The United States is now the world’s largest producer of petroleum and natural gas. Combined with new clean energy technologies, and improved fuel efficiency, and growth in oil and natural gas production, U.S. energy security is stronger than it has been for over half a century.” The Quadrennial Energy Review, April 2015

10. The Growing GDP Gap

11. Productivity Gap

12. Africa´s Electricity Gap

13. The Insidious Challenge of Subsidies

14. Climate Challenge

15. Continuing Role of Coal

16. Impact of Falling Oil Prices & Shift in Production Models Source: Eiichi Hasegawa

17. Economic Growth and Economic Outlook Projections

18. Global Oil & Gas Reserves in Proximity of EU The EU is located close to nearly 70% of the world’s oil & gas reserves.