The continuing politicisation of economic policy in the United States – attacks on independent institutions, hostility towards science and evidence, disruptive mercantilism and an environment of volatility, uncertainty and risk – is increasingly undermining the country’s own economic fundamentals. This does not only have domestic consequences. It is beginning to reshape global flows of both talent and long-term investment.
For highly skilled workers and patient capital, predictability, openness and institutional reliability are becoming decisive location factors. Stability itself is a geoeconomic asset. Turning this into an opportunity for Europe will require action.
Fragmented capital markets, complex administrative procedures and uneven innovation ecosystems still weaken Europe’s attractiveness for both investors and globally mobile talent. At the same time, economic security concerns require greater scrutiny of high-risk investments and protection against systemic dependencies, which can easily become an additional barrier if poorly coordinated.
Turning stability into a competitive advantage will therefore require proactive policy choices: deepening the single market, adopting a common approach to economic security, completing capital markets union, investing jointly in innovation, skills and research excellence, and developing a collective and attractive package to attract global talent, facilitating the in-migration of high-value individuals from the United States and elsewhere. If this proves impossible with all member states on board, a group of countries should move ahead.
This carries risks, but is preferable to continued inaction.
Fabian Zuleeg is Chief Executive and Chief Economist at the European Policy Centre.
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