Territorial Scenarios and Visions for Europe (ET2050) ET2050 Baseline scenario 2030 Narratives Version: 1 Date: 14 March 2012 Author: Oriol Biosca, Andreu Ulied Revision: All participants to TPG meeting Status: DRAFT Territorial Scenarios and Visions for Europe (ET2050) “Rather than a union, a region or an identity I would describe Europe as a narrative; the story, to be continued endlessly, of an endeavour which can never be fully achieved but which will make sense anyway, because of the hopeful efforts and good will put into it “ Jens Christian Grøndahl “Too seek Europe, is to make it!. Europe exists through its search for the infinit -and this is what I call adventure” Zygmunt Bauman Reference baseline sources The Baseline represents the future without any new radical policy intervention to change spontaneous trends and current policies. It is a projection, not a forecast, of an evolution in absence of new policies. The 2030 and 2050 Baseline Scenarios should strive to generate consensus, to be a useful reference for all. Baseline will not likely comply with most official political targets, and it can be understood as a pessimistic but still realistic future ahead. Therefore, the Baseline scenario hypothesis are built from existing baseline scenarios defined by European and international institutions, complemented by scenarios produced at different geographical scales and sectors, in the context of ESPON and other programs. A review of existing future-oriented studies in (http://www.et2050.eu/et2050_library/) The ET2050 Baseline scenario is based on the following forecasts and studies: - Population forecast as in EUROPOP2010 by Eurostat - Technological baseline trends as in Regional impact of technological change in 2020 by DG RESEARCH & INNOVATION - Economic and labour market forecast as in 2009 Ageing Report and 2012 Ageing Report (draft) by EC DG ECFIN - Energy and GHG Emissions forecast as in Energy Outlook 2030 (2009 update) by DG Energy - Transport forecast as in Policy Option 1 defined in the Impact Assessment of the 2011 transport White Paper by DG MOVE. - Spatial development trends as in the synthesis documentation prepared for the 15th Council of Europe Conference of Ministers Responsible for Spatial/Regional Planning, CEMAT/CoE (2010) Several other studies and forecasts are considered in the construction of the ET2050 baseline: Territorial Scenarios and Visions for Europe (ET2050) - World Population Prospects by UN - World Urbanization Prospects by UN - Global trends 2030 by FWA - The Urban Future by UNHABITAT - BP’s 2011 Energy Outlook 2030 - UNWTO’s 2011 Tourism Towards 2030 - Mapping the Global Future by NIC - World agriculture 2030 by FAO - Road to 2050 by World Bank - Visions 2050 by World Business Council for Sustainable Development - The limits to growth. The 30 year update by Club of Rome - The World in 2050 by HSBC - The World Order in 2050 by Carnegie Endowment for International Peace - The World in 2050 by PriceWaterhouseCoopers (PWC) ESPON studies: - ESPON Climate: analysis of European regions’ exposure and sensitivity to climate change, the impacts of the latter on regions, regions’ adaptive capacity and vulnerability (Environment, Demography, Economy). - EU-LUPA: methodology on land use change. - FOCI: analysis of demographic trends and social cohesion in European cities (Demography); analysis of European cities’ competitiveness and economic performance (Economy); analysis of cities’ position in research networks (Technology); analysis of city- hinterland relationships (Demography, Economy and maybe Transport). - GEOSPECS: analyzing strengths/weaknesses and development opportunities of specific territories. - GREECO (Green Economy): Of interest for the sectoral report with regard to environment and land-use. - INTERCO: indicators for territorial cohesion. - KIT (Innovation and knowledge economy): Of interest for the sectoral report on economy. - ReRisk: They provided a sectoral report on energy. - SeGI (Services of General Interest): They have written a separate paper on governance that might be of interest for the sectoral reports. - SEMIGRA (Selective migration and unbalanced sex ratio in rural regions): Of interest for the sectoral report on demography. - SGPTDE (Secondary Growth Poles): analyzing the potentials of Europe’s secondary cities. Territorial Scenarios and Visions for Europe (ET2050) - SIESTA (Spatial indicators for a Europe 2020 Strategy Territorial Analysis): the policy framework related to the EU2020 and the situation of the European regions on the various topics related to this Strategy. - TANGO (Territorial Approaches for New Governance): indicators for good governance. - TIGER and M4D: focus on a world perspective. - TIPSE (new project to be kicked-off soon on poverty & social inclusion): methodology to map poverty or exclusion at NUTS 3 level or lower; creation of territorial poverty maps; identification of extent to which these areas have changed over time (Demography). - Economic Crisis (new project to be kicked-off soon): examines resilience / capacity of regions using a composite concept (all thematics); might be useful when testing scenarios for sensitivity, exposure etc as it looks at regional effects of what is ostensibly an external/global shock. Ten key trends driving the 2010-2050 evolution 1. Ageing Population: Increasing ageing and labour scarcity in Europe due to persistent low fertility rates. Population growth in developing Asian and African countries leads to more selected immigration during the next decade, targeted to areas where lower skill jobs are available, as well as to cosmopolitan centres where more talented people is attracted. The consequences of ageing may be different for different regions and may affect migration flows across regions in different ways1. North-South internal migration linked to residential tourism, as well as urban to rural migrations. A major consequence of the ageing of the population is that the working age population will decline with downward effects on economic growth and competitiveness of many European regions. 2. Declining Economy. Continuation of present trends of globalisation, free trade, extension of resources through technological innovation, but less intensive than before. The gap in GDP and welfare between the EU and developing countries worldwide is reduced. A growing middle class emerge worldwide (approximately 100 million per year are expected between 2010 and 20502). European economy is more dependent on services and advanced tourism. Reindustrialisation limited to traditionally industrial zones. Increase of local markets for agricultural products. Transport industry, food processing and design niches may remain competitive up to 2050, but in other strategic sectors European industries may not be leading (microelectronics and computers, software, genetics, nanotechnology…)3. 3. Reactive Values. Salaries continue to loose purchase power and consumerism keep private debts high. Increasing perception of risks. More environmentally sensitive and reactive society. Rigidity in social institutions. Identities attached to the territory gain importance, leading to selected closure from foreign activities and cultural influence, excepts in cosmopolitan centres, increased protectionism and self-sustainability. Overprotected place- based strategies in wealthier communities. Informal relations still dominant in peripheral and less developed zones and conflictive neighbourhoods. 4. Reluctant innovation. The new technologic wave of innovations linked to nanotechnologies and biomedicine, energy and artificial intelligence will take longer than expected. Slow 1 Demographic and Migratory Flows Affecting European Regions and Cities (DEMIFER), Applied Research Project conducted in the framework of ESPON 2013 Programme, partly financed by the ERDF, 2010. http://www.espon.eu/main/Menu_Projects/Menu_AppliedResearch/demifer.html 2 D.Wilson, R.Dragusanu (2008), The Expanding Middle: the Exploding World Middle Class and the Falling Global Inequality, Global Economics Paper 170, Goldman Sachs 3 Adjiedj Bakas (2006), Megatrends Europe, published by Cyan. London UK. Territorial Scenarios and Visions for Europe (ET2050) implementation of actual technologies (e.g. Smart Cities, Electric Grid…) in Europe. Insufficient and unproductive research, with significant but limited exceptions. Ineffective planning. 5. Energy Scarcity. Energy prices (oil, gas) rising faster than expected. Even though a large increase in renewable energy is expected, fossil fuels will still be the most important energy sources in the short-term.4 In addition stronger impacts of Climate Change than projected by climate researchers, strong restrictive measures to reduce greenhouse gas emissions (fuel, taxes, emission trading schemes) further reducing economic growth, even if just partially implemented. EU energy dependency increases (import dependency in 2030 amounts 59% and in 2050 65%, compared to 54% in 20055) since renewal resources are less developed than planned. Growing territorial conflicts linked to resource and risk management, for energy and also water. 6. Subverted proximities. After successive enlargements, the EU territory has nearly reached continental size. More productive long-distance transport and communications services connecting some selected nodes in Europe to premium Global nodes. Neighbourhoods become more distant while some remote places become much closer. Political borders are overcome by flows. Geographic proximities are subverted by networks connecting from the body to the globe, as well as by Virtual Communities. Paradoxically, this tendency reduces the value of the territory as position and increases its value as place, and landscape. 7. Polarised Development. Increasing polarisation among more developed and less developed regions, as well as between cities in regions and zones within cities, beyond traditional core- peripheral paradigms. The electronic unravelling of traditional imperatives of adjacency may produce urban rearrangements but it is unlikely to result in random scattering and galloping decentralisation. Reduction of financial transfers and solidarity between regions and countries at EU level, as well as Cohesion Policies, due to the financial shortage of National administrations and growing Populism at National level. 8. Hybrid Geographies. Extraordinary diverse evolution of territorial patterns, from compact cities and nodes around transport nodes, to more disperse urbanisation, fragmented and specialised developments in a general tendency towards more relaxed land regulations and increasing land occupation. Europe becomes a “Middle Landscape”, largely composed by fuzzy urban-rural zones, with urban developments and housing customised to specific people’s and corporative needs. 9. Reforms Blocked. Increasing financial problems on public services related to social expenditures. Limited investments on infrastructure, and R&D focused on selected fields. Reduction of solidarity with Third Countries and increasing international conflicts. Territorial jurisdictions become less efficient, at all administrative scales. Either populists and technocrats in charge of bureaucracies unwilling to be reformed. Rising of corporative government. Political power partially transferred to international larger corporations. 10. European Deadlock: No significant advancement of European political integration, but increasing coordination on fiscal and labour policies among central EU countries while others have specific cooperation agreements with them, as well as with other neighbouring countries, and other countries worldwide, in a more complicated and variable institutional geometry. 4 Energy Outlook 2030 (2009 update), EC DGEnergy 2009. 5 Energy Outlook 2030 (2009 update), EC DGEnergy 2009. Territorial Scenarios and Visions for Europe (ET2050) Vital Signs of the Baseline 2010-2050 Trend Headline Scenario snapshots Rate of change 2010-2050 Population in EU27 peaks by Around 525 millions between 2040 with 526 millions, and 2030 and 2050, and declining Population growth rates from starts declining. after. +0,3% yearly in 2010 to Population 25% increase in age-related 17,4% of population older +0,2% yearly in 2030 and to - and social welfare than 65 in 2010, 23,8% in 0,15% yearly in 2050 expenditure between 2010 2030 and 28’7% in 2050. and 2050. Accelerating growth of Metropolitan areas driven by globalisation and knowledge society, especially capital From 55% urban population Urbanisation Increasingly urban EU27 cities; but population increase in 1950 to 73% in 2010, 80% in a number of medium sized in 2030 and 89% in 2050. highly rural towns linked to attractive landscape and quality of life. GDP per capita in 2050 GDP growth rate from 6% in 43.000 euros (1.8 times 1970 to 2,0% in 2000, 1,6% Perpetuated economic 2010’s). Economy in 2030 and 1,4% in 2050. slowdown Labour productivity in 2050 Labour productivity growth 100.000 euros per worker stabilised around 1,8% (2.1 times 2010’s) Convergence for government R&D expenditure in the EU, Inability to increase R&D but intense polarisation of investment to 3% (EU2020 private. R&D investment stabilised in Innovation goal). Weak research Old technologies and evading 1,7% of EU27 GDP. framework. technologies (emotion controllers, immersive virtual- reality) Energy imports from 54% in Decreasing energy 2005 to 59% in 2030 and consumption only after 2030, 65% in 2050. Between 2010 and 2050, Energy but increased energy RES in gross final energy 45% energy intensity6 drop. dependence. demand, from 11% in 2010 to 25% in 2050. GHG emissions in 2010 represent 87% of 1990’s, in 2030 76% and 2050 65%. Decreasing CO2 emissions Climate Still, 2050 EU27 target is to Between 2010 and 2050, but established targets are change not met reduce to 80%, by 2020 25% carbon intensity7 drop. (EU2020), and 20% by 2050 (July’09 agreement in G8 summit) Rail modal share below 5% in Total passenger transport Sustained growth of traffics, 2050 (6,6% in 1995, 6,2% in activity (including Transport and increasing share of road 2009) for passengers, and international aviation) to transport below 7% for freight (12,6% increase 51% between 2005 in 1995, 10% in 2009). and 2050. No further incorporations in Reforms Increasingly closed EU27 Only high skilled immigration, the Union after Romania’s blocked union allowed on demand. and Bulgaria’s in 2007 6 Energy required to produce a GDP unit (TOE per euro) 7 Emissions relieved per energy unit (CO2 tonnes per TOE) Territorial Scenarios and Visions for Europe (ET2050) 1950-2050 Pathways Population 1950 - 2050 Migrations 550 1.500.000 500 1.000.000 450 500.000 400 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 350 -500.000 300 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 -1.000.000 % population older than 65 years % of Urban Population 1950 - 2050 35,0% 100% 90% 30,0% 80% 25,0% 70% 60% 20,0% 50% 15,0% 40% 10,0% 30% 20% 5,0% 10% 0,0% 0% 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 GDP per capita 1950 - 2050 GDP growth rates 1950 - 2050 (%) 50.300 7,0% 45.300 6,0% 40.300 5,0% 35.300 30.300 4,0% 25.300 3,0% 20.300 15.300 2,0% 10.300 1,0% 5.300 0,0% 300 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Primary energy consumtion Energy intesity (MTOE/M€) 2.100 0,60 1.900 0,50 1.700 1.500 0,40 1.300 0,30 1.100 900 0,20 700 0,10 500 300 0,00 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Territorial Scenarios and Visions for Europe (ET2050) CO2 Emissions Carbon Intensity (MtCo2/MTOE) 6000,000 3,500 3,000 5000,000 2,500 4000,000 2,000 3000,000 1,500 2000,000 1,000 1000,000 0,500 0,000 0,000 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 A History of European Decline Without structural reforms, European countries will decline over the next years; this is the dramatic conclusion of most European policy documents, as well as the argument bodily stated by many experts8. But despite the claims to implement “without further delay” the structural reforms that are still pending from the Lisbon Agenda, European countries seem unable to carry on the necessary reforms, with the required intensity, in the context of the financial and economic crisis that started in 2008. Broadly speaking, in European countries people use to work less number of hours and have a lower productivity than in the USA or Asia, but salaries are high as well as people’s consumption levels and expectations on public services. Europe’s economies are not really global, in terms of investing in emerging markets, be open to new technologies. Europe seems no longer believe in itself9. Paradoxically, in this rather pessimistic view agree either those claiming in favour of deregulation and liberalization, and also those favouring stronger public policies and market regulations; either those idealists still aiming a Federal Europe, and those more pragmatic willing to reinforce politically Nation-States. It is not surprising that Europe is perceived by a large number of foreign analysts10 as resembling the myth of a sophisticated and declining old society: fragmented in a puzzle of Nationalistic institutions that rarely cooperate, with bureaucratic institutions at European level located in Brussels11, resistant to adapt to new technologies, very much urbanized and populated by risk-adverse elderly people that use to over consume sophisticated services rather than produce and save for the future, too much attached to old prejudices. The relative decay of European countries in the World is an unavoidable fact, in demographic, economic and political terms, given the ongoing growth in Asia, or Latinoamerica, but even their absolute decay seems a likely future ahead for many. This pessimistic view on the future of European countries is not new, first emerged at the beginning of the 20th Century. It was probably Oswald Spengler’s views on the Western decay12 one the most influential analysis of the future of Europe, written few years before the First World 8 This is the argument of the Europe 2030 report coordinated by Felipe González by the European Commission (2007), as well as the argument of the more liberal The Future of Europe: Reform or Decline by Alberto Alesina (2006). Many other European intellectual, like Tony Judt, from a different political view and cultural background, also shared this pessimism. 9 In Futurecast 2020. A Global Vision of Tomorrow (2008), Robert Shapiro, develops what he calls de “New Economics of Decline for Europe and Japan” 10 For instance, together with Robert Shapiro, recent books by Robert B. Reich, or George Friedman. 11 See among many Euroskeptics Sanftes Monster Brüssel oder Die Entmündigung Europas (2011) by Hans Magnus Enzensberger 12 Der Untergang des Abendlandes, by Oswald Spengler (1917), that was writen before the First War World. Territorial Scenarios and Visions for Europe (ET2050) War. Many more thinkers elaborated their views after Spengler’s views13, Against the feeling of decay, Italian Futurists proposed just to destroy Museums and all the remains from Roman times, from the Renaissance, even. It was a radical promotion of physical strength and youth as a value, in that times, from the Spanish Young Barbarians to the Young Turks created by Kemal Atatuk. At the end of the First Globalisation period, powered by impressive technologic innovations such as the steam boats and railways, transoceanic telephone lines and radio stations, the economic and political ultimate conflicts among European Nations ruling Colonial Empires world-wide resulted in the First World War. Later on, in the context of the economic crisis of the thirties, the first crisis originated by a financial turmoil at global level, free trade ended, protectionism raised, as well as Nationalism, in most European countries. Not surprisingly, the extremely severe conditions imposed to Germany in Versailles lead towards the more extreme Nationalisms. One of the most vivid accounts of the spiritual destruction of the open, cosmopolitan and conservative bourgeois Europe that somehow existed in the latest years of the eighteen century, was written by Stephan Zweig, before killing himself and his wife after being exiled in Brazil14. The decay announced by Sprengler ended up in Apocalyptic second destruction of Europe in half a century, with dozens of millions of people death15. With cities destroyed in Germany, Italy, Netherlands, large parts of Poland, France, as well as London, a huge process of reconstruction started to build houses and public infrastructure. In some cities old historical centres were regenerated. Strong public policies, in the West of Europe partially financed by the Marshall Plan, helped the process of reconstruction. European countries released their old colonies, in Africa, in Asia, in America, at the same time started the slow process of economic recovery, and to some extend political integration, in a World divided by two major Superpowers, the USA and URSS. From 1945, European countries were divided in two separated worlds. Many of Milan Kundera’s novels written in Prague, in the seventies, have an intense sense of nostalgia evoking the lost of the Europe of Kafka, or Zweig. Many intellectuals aimed to somehow save, or better recreate, the Idea of Europe16, for the future, such as Denis de Rougemont. Prague was perceived no more in the center of Europe, since Europe was lost, but in the East, much closer to Moscow than to Wien. Being European was like being Mediterranean, or Nordic, a weak cultural identity somehow attached to a given geography or a particular weather. Garibaldi made Italians after unifying Italy politically. There are Germans, and Frenchs, even Scottish and Flemish, or Liberals and Communists, but Europeans not yet. Only after the war Europe started to have political relevance, with the treaties among countries to create an economic more integrated zone, and a cultural meaning. Europe, as Zygmunt Bauman thinks, is a new adventure, a future dream, a common project that has to be built to overpass a history of National conflicts17. 13 See La Revolución de las masas, by Ortega y Gasset (1922), The Future of the West by J.G. Beus (1955), among many others. 14 See Die Welt von Gestern by Stephan Zweig (1940’s). 15 In Germany, Year Zero (Roberto Rossellini, 1948) the main character, a boy overwhelmed with the misery, grief and desolation the war has brought to Berlin, loses all hope and finds in death his escape. Situations that involve a day-to-day survival with no expectations of the future can also be found in Schindler’s List (Steven Spielberg, 1993), a film about the Holocaust of the Jewish ghetto of Warsaw set in an apocalyptic context. Schindler’s List characters have been deprived of their freedom and their pain and suffering continues throughout their imprisonment. As there is no hope, the only thing they have left is resignation and the upcoming death is accepted. 16 See The History of the Idea of Europe by Kevin Wilson & Jan van der Dussen (1993), as well as Vingt-huit siècles d’Europe. La conscience Européenne à travers des texts by Denis de Rougémont (1971). 17 In this sense, according to Jens Christian Grøndahl, rather than a union, a region or an identity Europe can be described as a narrative; the story, to be continued endlessly, of an endeavour which can never be fully achieved but which will make sense anyway, because of the hopeful efforts and good will put into it Territorial Scenarios and Visions for Europe (ET2050) The process of building up this dream have proved so difficult that after half a century maybe Europe is still struggling to be an effective economic integrated zone, having the necessary monetary and fiscal coordination. European countries recover economically during the sixties and early seventies, but still in this period large countries continued to release their former colonies, often after wars causing hundred of thousand of victims (UK in India 1947, Spain in Morocco 1956, France in Argelia 1962…), the economic and military dependence from USA and the URSS was very high in Europe (the URSS military intervene to stop political reforms in Budapest, 1956, and in Prague, the 1968; the USA established military bases in many countries). The idea of decay, and dependence, were still associated to European countries: they were not just decaying but they consist on decay, even if they may have periods of economic growth. The next phase of industrialization provoked an intense migration from country to cities, from southern less developed regions to more industrialized central regions. Differences were exacerbated between abandoned sparsely populated rural areas and cities growing too fast, in large suburbs with lower density than central cities. Master plans developed and urban plans based on the modern zoning system helped to define limits to growth and new towns, but their impacts they were different over Europe; in large parts of the Mediterranean Coast, for instance, traditional settlements were dramatically change because of mass tourism. The most dramatic case could be Rumania, when a Ceausescu’s plan pretended just to make Tabula Rasa from the traditional previous structure of towns. Infrastructures and services were extended, particularly roads and airports, still following a Nation-building vision, different country to country. European countries, to release social and political conflicts, developed advanced welfare systems to provide equal opportunities for health and education to all citizens, equal development opportunities to all regions so people don’t have the need to migrate for economic reasons. The emerging European institutions created Structural Policies aiming to help first southern regions to bridge the development gap with northern more developed regions. During the crisis of the seventies, mostly in USA and in UK, begin and intense process of reducing the public sector capacity to intervene and regulate markets. The planning system, traditional in UK, was to a large part dismantled and later on was gradually reconstructed based on different paradigms, more bottom-up and participatory, encouraging public and private partnerships. Until late 1990’s, Europe manage to keep a relatively stable economic growth ratio In this context, the end of communism regimes in Eastern European countries, and the Maastricht Treaty, represented a critical milestone in the process of European integration. Europe, as Idea, emerged in the mid nineties, peaceful, democratic, with a balance public and private sectors aiming a sustainable and cohesion economic growth; Europe was a unique experience of political integration, it represented the vision that Europeans propose to the rest of the World. The decay of the old European countries, was somehow giving birth to the emergence of the new Idea of Europe? During the war of Balkans, between 1992 and 1994, produced some 150.000 casualties, European countries were able to act on time, proving once more the difficulty that European countries have reacting all together, in most critical situations. European countries, like the rest of Western World, entered in the End of Times, in Francis Fukuyama famous sentence, a post-ideological World, with liberal democracies established around the planet. Information and communication technologies, mostly developed in the USA by new emerging corporations like Microsoft, Apple, Intel, ORACLE, helped large industrial corporations to manage their business interests world wide, in the so-called Second Globalisation, the period that last until the global financial crisis of 2008. The narratives we share on the 2008 crisis are similar to those we share of the first financial crisis in 1929, that also emerged in Wall Street; like the 1929, the crisis is due to the same reasons: the excess of optimism of financial corporations competing in badly or none at all regulated National and global markets. According to many analysts there maybe deeper reasons: the industrial Territorial Scenarios and Visions for Europe (ET2050) delocalisation from USA and Western European countries mostly towards Asia, combined with the substitution of jobs by new technologies and better management, tend to push salaries down and therefore reduces the available income of working and middle classes in the Western World, increasing the gap between rich and poor people for the first time in decades, specially in the USA due to the weak fiscal regulation and the limited role of public administrations investing in education, health or public infrastructure. The rapid growth of emerging economies, China and India, as well as the former Tigers, together with Brazil, on the other hand, has increased the available incomes of people in these countries, and people still tend to increase their savings instead of their consumption, as happens in Western societies. Paradoxically, the less developed countries have increased the liquidity managed by financial institutions in a deregulated market world wide, to a large extend financing public debts. The public welfare systems of working and middle classes in European countries during the last decades can not be fully explained by their increase on productivity, but by their increasing debt. The apparent welfare improvement in many European countries, especially in the South, was not real, not sustainable. Europeans can not afford to sustain financially their Dream. Once more, the narrative of European societies as declining, unable to carry on the necessary adjustments, seems reinforced but the facts. This is particularly true for Southern European countries that, in the context of a booming economy, benefit from relatively large transfers of resources included in the Structural Funds, and the Cohesion Funds, approved in early nineties, that not always were invested in productive assets and have often generated a subsidy culture that makes societies even more dependent, unable to take care of themselves. The inefficiencies of Cohesion, and Agricultural policies, even if well-known, seem difficult to solve, while policies that obviously have sense only at continental level, like research and innovation, or transport and energy, still remain largely dependent on National concerns, with many paradoxes like Spanish private companies being able to manage transport facilities, airports or ports, in other European countries but no in Spain, where still are centralized and controlled by a public authority. Human capital is the key strategic instrument for ensuring success in the global economy. And yet, Europe has lost considerable ground in the race to a knowledge economy. Catching up will require an unlikely coordinated effort. Europe will probably also fail implementing a common energy policy with both internal and external dimensions that will allow us to achieve greater energy efficiency and savings of the kind advocated in the Europe2020 strategy, and diversify our energy supplies from third countries. Europeans also need to embark on a serious discussion about the need for safe nuclear energy in Europe, and to define the contours of a permanent system of incentives for the development of alternative energy sources. Europe must continue leading the fight against climate change, but this goal will become increasingly rhetorical in the emerging world order and the mistakes made in Copenhagen will be repeated. Europeans will not be able to tackle our demographic challenge in the right terms. No urgent measures will be taken, and our ageing societies will put unsustainable pressure on our pensions, health and welfare systems, and undermine our economic competitiveness. Migration from the rest of the World to Europe will remain stable, and relatively small in the future, and European will become and aging society with growing needs in social and health services. Priority measures are well known, must include increasing the proportion of women in the workforce; facilitating a better work-life balance; reforming our approach to retirement, so that it is seen as a right and not an obligation; and developing a more pro-active immigration policy suited to our demographic and labour market needs. But the implementation level of these policies will vary a lot among different countries. The European will not be able to strengthen the Single Market against temptations of economic nationalism and will not complete it to include services, the digital society and other sectors, which are likely to become the main drivers of growth and job creation in a market of 500 million Territorial Scenarios and Visions for Europe (ET2050) users and consumers. The strengthening and completion of the Single Market will fail because it will not be accompanied by improved tax coordination. Europeans must reform the labour market and modernise our corporate governance practices. If we are to fully realise the potential of the technological revolution, we must make major changes to our labour market structures. Some Member States have already implemented successful reforms based on the model of flexicurity; but many other countries will not learn from these experiences while adapting them to our different national circumstances. Labour productivity must become a priority, but productivity gains will not be made directly proportionate to levels of income The leadership needed for a reform seems impossible in the actual decision-making processes that exist in Europe. The reaction of European public institutions in relation to the process of dealing with the actual crisis demonstrate more the difference of positions between National governments, running very heterogeneous economies, that the overall long-term common interest of all. Beyond the necessary austerity measures focused on getting public finances right, the capacity of European institutions to impose sound investment criteria on those countries at least when using European funds seems unlikely. While productive economies sensitive to industrial exports may favour a deflationary economy, economies having high debts in foreign currencies may flavour a more inflationary economy, with an strong euro. In this context, a decaying European economy with increasing gaps between productivity and welfare across regions and social groups seems very likely for the next decades. Nationalism will rise at country level, and national bureaucracies will increasingly feel responsible for maintaining National cultures in front of the cultural globalization process, with people increasingly attached to virtual and non territorial communities. The European political integration will remain more difficult, also because the emotional attachment of people will be either to the town or the place they live, or National, or more cosmopolitan. The process of enlargement will stop, neither Russia nor Turkey or Morocco will become members of the European Union, but it is possible that countries will leave the European Union. The Union is becoming therefore of variable geometry. European institutions will become increasingly bureaucratic, and the European Dream born in the post-apocalypse will not happen18. An excessive optimism on globalization and technologic progress combined with the incapacity of the European society to move towards less materialistic behavior, in a context of resource scarcity and environmental constraints, leads Europe to a semi-permanent state of crisis pushing a substantial number of regions towards decline. At Global level, Europe is competitive in the service oriented industry sector, aimed at satisfying the needs of an exponentially growing tourism activity propelled by the increase of middle classers in largest World nations like China, India and Brazil. Implementation of emerging innovations linked to nanotechnologies and biomedicine, energy and artificial intelligence is slower than expected, and research is mostly deployed in “old” technologies (Smart Cities, Electric Grid…) and new “evading from reality” devices such as emotion controlling drugs or virtual reality devices. Inefficient planning and rigid governance structures increase the general state of disorientation. Climate change worsens as established targets cannot be met in time. Disparities until mid 2020s increase with further integration of EU Member States takes place. However, with a severely old society (1 out of every 5 inhabitants is older than 85 already by 2030), the increased social and age related expenditure forces the EU to retrieve for many 18 Small numbers of people who are passionate (ethical), wanting change (radical) and well-organised (tribal) can seize huge political power, change consumer markets, alter public policy, and transform business-as-usual tendencies. According to Patrick Dixon, author Futurewise: Fast, Urban, Tribal, Universal, Radical, Ethical are six faces of unexpected futures. . Territorial Scenarios and Visions for Europe (ET2050) cohesion policies, and inequities recover a trend towards increase in Europe. Disequilibrium in different parts of Europe, both economically and socially, become notorious. Some countries, regions, even neighborhoods will keep significantly progressing economically while others will have substantial difficulties to develop or will enter in structural crisis. Performing regions can grow beyond 3% yearly, concentrating creative capital, R&D development, innovative industry, and financial squares, while lagging regions show very fluctuant instable patterns of growth, with poor average rates over time. . Timeline 2010-2020 Lost Decade. The first decade of the 21st century will be remembered for a series of losses, and failures. We are challenged to find opportunity within the reverberation of the Lost Decade and its resulting wave of interrelated economic, social, political, and ecological crises. The crisis leaves a permanent loss in wealth and an eroded potential for future growth. 2020-2030 Fragile Recovery. The array of policy changes that flowed from the previous decade were explicitly targeted for higher growth, different countries and regions following specific paths. Protectionism becomes the common rule, flows of people become more rigid, and as a consequence, societies tend to enforce their identities making governance at EU level difficult. It is a world of closed social networks, gated communities, self-detached societies. The spiritual dimension gains importance at the center of people’s life, even if believes are in own personal “inspirations” rather than in “God” Beyond 2030 The End of the European Dream? The European political integration will remain unfeasible. Some countries will leave the common currency and the European Union. The Union is becoming therefore of variable geometry.
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