European Commission

There is a great diversity of demographic dynamics across the globe. Some world regions will experience steady population growth, whilst others will face severe population decline. Population growth in Europe will slow down considerably relative to the United States and the emerging economies of China and India and Europe is the second most rapidly ageing world region, after Japan. Europe's immediate neighbourhood, the Middle East and North Africa region has the world's second fastest growing population, after sub-Saharan Africa. Demographic developments in South East Europe and in the European CIS countries will be similar to that in the EU. Future migration flows towards the EU will mainly arrive from the Mediterranean region, in view of differences in living standards and population trends exacerbated by natural resource constraints.

There are however wide variations in demographic patterns between and within Member States. Regional variability will depend on various factors such as fertility rates, migration flows, gender, health, disability and the demographic patterns of ethnic groups. Three important processes – notably population decline, shrinking working-age population and an ageing population - will have a marked effect on regions. These variables have been combined in a demographic vulnerability index, mapping the regions which will be particularly vulnerable to demographic challenges. Around one third of European regions will face population decline, located mainly in Central and Eastern Europe, Eastern Germany, Southern Italy and Northern Spain. The highest shares of elderly population will be found in Eastern Germany, North-West of Spain, Italy and some parts of Finland. In Central and Eastern Europe, the impacts of
ageing will be delayed owing to their younger population. However, significant increases in their old-age population are expected in the long run.

The share of working-age population is expected to be particularly low in several of the Finnish, Swedish and German regions. The magnitude of decline in the working-age population shows significant variations. Some regions in Bulgaria, Eastern Germany and Poland will be particularly hardly hit, with a decline exceeding 25% by 2020. Demographic change will potentially impact on regional growth through a shrinking labour force. The extent to which a shrinking labour force will constitute a drag on growth will largely depend on the educational attainment, productivity of the labour force and on future participation rates. Ageing will lead to significant increases in public expenditure, in particular on pension, health and long-term care. Ensuring access to high quality public services will constitute a major challenge for European Member States and regions. Increasing urbanisation will impact on environmental sustainability, in particular on the use of natural resources and eco-systems. The socio-economic integration of migrants and marginalised groups of society will be precondition to mitigate the complex effects of an ageing population.

The significant regional divergence in demographic patterns will most likely generate a substantial asymmetric socio-economic impact on European territories, which might further increase regional disparities in Europe.

Today's global financial and economic turbulence adds a high degree of unpredictability about the future of the world economy. In this context, it is even
more important to examine the extent to which Community policies are adapted to future challenges that European regions will face in the coming years and what the role of Community Policies should be in responding to these challenges. The reflection process on the future of cohesion policy takes place in the context of the budget review, following the mandate received in 2005/2006 "to undertake a full, wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy, and of resources, including the United Kingdom rebate, and to report in 2008/2009". In this context, the Commission launched a public consultation based on its Communication "Reforming the Budget, Changing Europe" adopted on 12 September 2007. This consultation paper presented the Commission's approach to the budget review. It sketched out the new policy challenges which could have a significant impact on where the Union directs its efforts in the future and, at the same time, made an assessment of the added value of EU spending, a condition for choices on future spending priorities. Among the challenges identified, the following four may be of particular relevance for European regions:

-Globalisation is driving scientific and technological progress, making the European dimension ever more important in boosting knowledge, mobility, competitiveness and innovation. The opening up of huge new markets creates vast new opportunities for Europeans, but it will at the same time test Europe's
capacity to further adjust to structural change and manage the social consequences of that change. The transformation to a knowledge and service economy is as profound as the earlier changeover from agriculture to industry.

-Demographic change will transform the age and employment structure of our societies, raising important issues of both economic efficiency and intergenerational equity. Migratory pressure will have a particularly strong effect on Europe, due to its proximity to some of the world's poorest regions and those likely to be worst affected by climate change and natural resource constraints.

-The impact of climate change on Europe's environment and its society has become central to the European agenda, challenging policymakers to reflect on how best to respond with the policy instruments at the EU's disposal. This applies both to efforts to mitigate climate change by tackling the growth in
greenhouse gas emissions and the need for measures to adapt to the consequences of climate change.

-Secure, sustainable and competitive energy represents one of society's main challenges. Limited supply, increased global demand and the imperative to cut
emissions have led to a new realisation of the need to move towards a lowcarbon
economy in Europe.


Together these challenges will impact on the development of Europe's economies and societies over the coming years. This document seeks to explore the regional effects of these challenges in the medium-term perspective of 2020. It seeks to illustrate which regions are most vulnerable to these challenges, as a step towards a better understanding of the potential pattern of regional disparities that these challenges will generate. Regional disparities in economic output and income in the European Union are far more extreme than in similar economies such as the US or Japan, particularly following recent enlargements. The richest regions are eight times richer than the poorest regions. The key cohesion challenge will therefore continue to be the integration and convergence of the new Member States, in spite of impressive GDP growth rates in recent years. Growth in the countries which have been the largest beneficiaries of the policy in the period 1994-2006 – Greece, Spain, Ireland and Portugal – has been marked, although development needs persist in some Southern European regions, Eastern Germany and peripheral areas. In short, the primary dimension of regional income disparities in the EU remains East-West, with a weaker North-South dynamic and core-periphery pattern at both EU and national levels. One question that this document seeks to address is whether the new challenges will further consolidate this pattern or generate new territorial disparities. Such an exercise is, by its very nature, limited; it simplifies a complex reality and focuses on a single regional level.4 It cannot substitute for a detailed analysis of specific national and regional contexts, nor take into consideration the capacity of Member States and regions to respond. As with all prospective work, this exercise is based on assumptions which appear reasonable today, but which may or may not correspond to future reality.

This report is an update and extension of the previous trend scenarios for development of energy systems taking account of transport and GHG emissions developments, such as the “European energy and transport - Trends to 2030” published in 2003 and its 2005, 2007 and 2009 updates1. The purpose of this publication is to present the new "EU Reference scenario 2013" ("Reference scenario" later in the text). This Reference scenario was finalised in July 2013. It focuses even more than previous ones on the energy, transport and climate dimensions of EU developments and the various interactions among policies, including now also specific sections on emission trends not related to energy. Its time horizon has been extended up to 2050. It reports for the first time on EU28 including Croatia. Moreover, the modelling process has included four rounds of consultation of Member States experts on Member State specific assumptions and draft modelling results. The responsibility for the results rests, however, with the authors of the scenario who were commissioned to do this work by Directorate General for Energy, Directorate General for Climate Action and Directorate General for Mobility and Transport.

This new update is based on the latest available statistical year from EUROSTAT at the time of the modelling (the year 2010). In comparison to the previous version, the newest macro-economic data already shows the statistical effects of the on-going EU's economic downturn in activity of different sectors as well as energy consumption and GHG emissions. The demographic and economic forecasts reflect recent projections by EUROSTAT and the joint work of the Economic Policy Committee and the European Commission (DG ECFIN) respectively. The "Ageing Report 2012"2 has been the starting point of this exercise giving long term population and GDP growth trends up to 2060 while the short and medium term GDP growth projections were taken from DG ECFIN.

The recent boom in shale gas development and exploration of unconventional oil reserves are increasing the fossil fuel reserve basis and thus changing the projections about the developments of international fuel prices. The fuel prices have been updated in the new scenario to take into account the recent developments. Significant progress has been made towards the achievement of the targets set out in the EU Energy and Climate Package, and new legislative measures, most notably the Energy Efficiency Directive3, have been adopted at EU level. Several changes have occurred at national levels as well.

This report focuses on trend projections understood in the sense of a Reference scenario. Similar to the Reference scenario latest update from 2009, this Reference scenario starts from the assumption that the legally binding GHG and RES targets for 2020 will be achieved and that the policies agreed at EU level by spring 2012 (notably on energy efficiency) as well as relevant adopted national policies will be implemented in the Member States. Following this approach the Reference scenario can help enlightening the debate on where currently adopted policies might lead the EU and whether further policy development, including for the longer term, would be needed. This Reference scenario can therefore also serve as benchmark or reference for assessing the impacts of envisaged policy initiatives at EU level in the areas of energy, transport and climate. Some technology development forecasts have changed since the latest update in 2009 both in positive way: faster than expected development for solar PV technology and negative: slower than expected developments for CCS and remote off-shore wind technologies.

Furthermore, international events, such as the Fukushima nuclear accident of March 2011, have changed the perception related to nuclear power generation and tightened the security requirements for nuclear technologies. In the context of climate change policies, specific Copenhagen/Cancun pledges for 2020 have been also set in other world regions, which have been considered in the world energy price modelling part of this exercise.

This report analyses the economic and budgetary impact of an ageing population over the long-term.

In 2010, the ECOFIN Council gave the Economic Policy Committee (EPC) a mandate to update its common exercise of age-related expenditure projections by 2012 on the basis of a new population projection by Eurostat.

The long-term age-related expenditure projections provide an indication of the timing and scale of changes in economic developments that could result from an ageing population in a ‘no-policy change’ scenario. The projections show where (in which countries), when, and to what extent ageing pressures will accelerate as the baby-boom generation retires and average life span in the EU continues to increase. Hence, the updated projections of age related expenditure and the associated sustainability assessments provide important insights on both the economic impact of ageing and the risks to the long-term sustainability of Member States’ public finances reflecting new economic environment, affected by a durable impact of the current crisis, and further reform effort by EU MS.
This report, presented to the ECOFIN council in May 2012, details the expenditure projections covering pensions, health care, long-term care, education and unemployment transfers for all Member States.

The report is structured in two parts. The first describes the assumptions underlying the population projection, the labour force projection and the other macroeconomic assumptions. The second part presents the projection of expenditure on pensions, health care, long-term care, education and unemployment transfers. A statistical annex gives a country-by-country overview of the main assumptions and results.

"This paper is built around ‘trends, tensions and transitions’ in the Euro-Mediterranean space. In ‘trends’ we examine the way in which critical issues in the region are evolving and how they might develop over the next twenty years. ‘Tensions’ considers how these trends will interact to generate stresses at different socio-political levels. ‘Transitions’ explores some options for intervention to correct malign tensions and benefit from benign ones; the particular choice of the ‘transitions’ is based on the four themes of cooperation described above: managing conflict; win-win projects; deeper economic integration and eventually moving towards a Euro-Mediterranean Community".

Recent developments in the world and the strong European commitment to a regulating globalisation argue in favour of a forward looking analysis. “The World in 2025” first underlines the major future trends: geopolitical transformations in terms of population, economic development, international trade and poverty. Secondly, it identifies the likely tensions: natural resources (food, energy, water and minerals), migrations or urbanisation. Finally, it defines possible transitional pathways: towards a new production and consumption model, towards new rural-urban dynamics, towards a new gender and intergenerational balance. “Rising Asia and socio-ecological transition” is the explicit sub-title that could be an inspiring source for the future strategy of the European Union.

This report summarizes discussions among a group of experts who met on 1 July 2011 to examine the prospects for cooperation in the Atlantic space. Summarizing the tenor of these discussions is a challenge given the wide variety of experts involved – academics and government officials from all parts of the Atlantic participated, drawing on themes across a range of issues – economic, security, energy, environmental, crime and many others. The report therefore stays close to the original discussion, with some small editorializing here in this executive summary and in the conclusion.
The Atlantic space is a region connected by growing linkages and common challenges. One of the aims of this conference was to begin thinking about and elaborating that which distinguishes and unites the region, and indeed whether unifying characteristics are sufficient to overcome the divergences and disparities among these four continents, which together house the world’s richest and its poorest.
It is clear that economic flows and social linkages are growing across the Basin. Investment, trade, migration, social networking, criminal activities, and other indicators are on the rise, though in some cases the same is true for extra-Atlantic interactions, especially with Asia. Yet most agreed that these flows and links alone were sufficient to call for agenda-setting on governance issues, and to begin thinking about how to resolve common problems collectively.
Meanwhile Northern Atlantic basin states are the architects of the post-war economic and security order – a liberal order whose foundational ideas remain more widely accepted today than its institutional architecture, which represents a snapshot of the distribution of power in 1945. In the absence of global agreement on reframing institutions of governance, it seems doubly important to examine the Atlantic space as a region ripe for better mechanisms of cooperation.
In terms of cross-border interactions, conference participants discussed activities between social actors such as private enterprises; they looked at region-wide economic and social activity; they disaggregated activity by state and by sector. Different pictures emerged from these analyses. Taken as a whole, economic activity between South America and Africa is low (by comparison to the EU-US relationship), but in certain areas like mining and energy there is growing investment in Africa, especially from Brazil. A bewildering host of challenges and concerns emerged from these discussions. Promoting security linkages in the South Atlantic – where there is virtually nothing in place – was seen as important both because of Brazil’s rising military strength and also because new discoveries and new technologies make it possible to exploit offshore resources more comprehensively.
Likewise, new security threats – including drug shipments, piracy, and other illicit activities – threaten weak littoral states and call for cooperative security solutions. Energy, climate change, and natural resources are a key theme in the Atlantic. The divergence between the most and least efficient producers (and the most and least prolific consumers) is perhaps greater than anywhere else on the planet. The North Atlantic states have technological solutions that are the most advanced in the world. Yet they cannot translate into control of agendas and solutions, or preservation of historical rights and access to common resources. Governance mechanisms for common resources have been devised in the North
Atlantic. How can these be translated successfully to other parts of the basin? Thus, different parts of the Atlantic basin clearly have diverging objectives and concerns given varying levels of development, democratization, and security challenges. Opening the discussion of these factors raises a host of questions needing attention, among them:
★ How do interactions drive interests and what does that mean for Atlantic basin cooperation? Most (but not all) Atlantic states are market economies and democracies – can norms and values also play a role in driving cooperation, and if so what should they be?
★ What should the emerging powers of the South Atlantic do with their power? Can they serve as anchors (along with North America and the EU) around which all Atlantic states can coalesce in order to promote democracy and development, and to find solutions to common natural resource problems?
★ What is the best way forward for cooperation and policy coordination? A sectoral approach often seems most feasible, drawing together stakeholders in agreements which are limited to interested actors and to narrow sectors. But how does this affect national sovereignty? Is sovereignty still so tightly held by most states that meaningful cooperation is precluded, or can cooperative solutions be forged among Atlantic basin states without EU-style relaxation of sovereignty norms?
★ What role do (and should) civil society groups play in the Atlantic space, and how do we best ensure respect for democratic accountability and the rule of (international) law given the deep power imbalances and the diverse interests at stake?

The book presents compendium of speeches from the Global Jean Monnet Conference on European economic governance in 2011. It discusses the future of the European Union and on the future of European economic and monetary integration. Speakers address following issues: safeguarding the stability of the euro area and the enhanced instruments for crisis intervention, reinforced fiscal and macroeconomic coordination and surveillance: economic aspects, strengthening the governance of the euro area: political and institutional aspects and the EU and global macroeconomic governance (G8, G20, IMF).

On 25-26 May 2010, the Jean Monnet Programme organised a two-day Global Jean Monnet Conference entitled "The European Union after the Treaty of Lisbon". As has been a biennial tradition for more than a decade, the Global Jean Monnet Conference was joined by ECSA-World, i.e. the network of national European Community Studies Associations that are active world-wide. The Conference, which took place at the European Parliament, brought together 420 leading policy-makers, diplomats, renowned academics, journalists and civil society representatives from 69 countries. The Global Jean Monnet / ECSA-World Conference confirmed its reputation as "a platform to reflect on major policy developments and coming priorities" and provided an in-depth analysis of the impact of the Lisbon Treaty in four main areas: the EU's institutional balance and institutional co-operation, fundamental rights and EU citizenship, the new EU framework for confronting global economic challenges and the EU as an international political and security actor.

We can rise to the Europe 2020 challenges of dealing with an ageing population, securing sustainable resources, developing clean energy supplies, improving healthcare and combating climate change – but only if we take effective short, medium and long term action. This is why the European Commission asked twenty five leading analysts to look into the future and work through a number of scenarios to see where the EU might be in 2050. Their work, presented in this Global Europe 2050 report, analyses three key scenarios which describe different but nonetheless possible pathways that Europe could choose to follow over the decades to come.