EUROPE IN A CHANGING WORLD: NAVIGATING THE CHALLENGES, SEEKING OPPORTUNITIES, AND BUILDING RESILIENT ECONOMIES

“Reality cannot be ignored except at a price; and the longer the ignorance is persisted in, the higher and more terrible becomes the price that must be paid” (Aldous Huxley) Scientific Background and Analytical Challenges Europe is facing significant challenges as it seeks to maintain economic stability and adapt to an evolving geopolitical landscape. De-globalisation trends, which have been observed in goods trade and foreign direct investment, but less so in areas like services or innovation, may have complex implications for global value chains, economic efficiency, capital allocation, R&D incentives, and the structural transformations that are needed to achieve climate neutrality. The COVID-19 pandemic has laid bare the vulnerabilities of global supply chains and the dangers of over-reliance on foreign industries for critical supplies. It has acted as a catalyst for nations to reassess their industrial strategy, specifically in sectors such as healthcare and technology. In the realm of supply chain resilience, industrial policy has emerged as a key tool. By bolstering domestic capabilities and promoting economic diversification, sourcing from multiple geographies and firms, industrial policy can insulate countries from supply chain disruptions, reducing economic vulnerabilities during crises. Moreover, the escalating geopolitical tensions and looming trade wars have further prompted nations to re-embrace industrial policy. Governments are deploying these strategies to navigate the uncertainties and to secure a competitive edge in strategic sectors such as defence, energy, and artificial intelligence. The European Union itself is reflecting on the positive externalities of Members States investment in defence and on the role of the EU in promoting this investment, while preserving its single market, setting up its first ever common defence industrial strategy to enhance Europe's readiness and security. The EU’s response to these ongoing trends and its position in the new world order may determine its economic potential, welfare, and the development of its single market. Its currency, which this year is celebrating its 25th anniversary, can play an important role in shaping the geopolitical and geoeconomic position of the European Union. The 25th anniversary of the Euro's introduction prompts a reflection on the ongoing economic research questions surrounding this currency. Adopted by 20 out of the 27 EU member states, the Euro has sparked extensive discussion about its influence on the stability and growth of the Eurozone's economy and its potential international role. A stronger international role for the euro has much to offer, not only to the euro area and the EU but to the whole international monetary system. Ongoing policy initiatives, including the European Banking Union, the European Capital Markets Union, the digital euro and the enlargement of the euro area and the EU can contribute to unlock the full potential of the euro as a dominant currency, which would also bring a stronger influence for the EU at the global stage. Purpose of the Conference The purpose of the conference is to better understand the role and the limitations of EU policies and strategies for seizing and creating new opportunities and building competitive and resilient economies that are able to adapt and flourish in the context of a changing geopolitical and economic landscape, possibly characterised by fragmentation and higher uncertainty, but also by global challenges including climate change. The Scientific Committee will consider papers that contribute to the understanding of the implications of ongoing trends in global trade, including changes in the organisation of global value chains, and their impact on economic efficiency, capital allocation, and incentives for innovation and investment, also in low-carbon technologies, as well as contributions analysing the costs and benefits of industrial policies aimed at the development of strategic sectors, including inter alia defence, energy, healthcare and high-tech, and its implications for the EU single market. Papers should establish clearly how their analytical framework of results apply to the understanding of the geopolitical and economic challenges described and how they can inform the design of EU policy responses. The Scientific Committee will welcome theoretical and empirical papers that exploit these issues. It seeks to attract contributions by academics involved in a broad range of relevant fields including: • Industrial economics and industrial policy, notably including for strategic sectors • Political economy, economic geography • International capital flows, and geoeconomics • Global value chains • (De)globalisation trends and international trade.. In addition, to celebrate the 25th anniversary of the euro, this years’ ARC also invites submissions dedicated to analysing issues related to the single currency and its strategic importance for the EU and the rest of the world. In this context the Scientific Committee will also welcome submissions related to: • The international role of the euro: state of play and determinants • Benefits and costs of a greater international role for the euro • The euro and the international monetary system • Euro area enlargement • How to strengthen the international role of the euro: EMU capital markets and institutions The conference should enable a lively exchange between researchers and policymakers. It will feature the presentation of a limited selection of papers to spur discussion. Additional papers will be displayed in the form of posters.