Strategic Panorama 2009 - 2010 - IEEE

The global recession and its impact on international economic relations
and the Financial Stability Council. Furthermore, although it is difficult for
the Fund to be assigned functions involving the coordination of exchange
rates, it should be a forum for monitoring the vulnerabilities the world
economy faces, particularly in connection with financial bubbles or global
macroeconomic imbalances.
If the progress made in these areas reduces the frequency and severity
of crises and prevents the contagious effects that have such an impact on
the emerging economies, the IMF’s legitimacy will improve substantially,
and with it the ability of the world economy to grow in a more sustainable
and balanced manner.
IMPLICATIONS FOR THE EUROPEAN UNION
Like the rest of the world, the European Union was unprepared for the
financial crisis and for the ensuing economic recession. Financial panic,
plummeting production and the huge contraction of international trade
have raised unemployment and reduced the wellbeing of Europeans, who
have suddenly become poorer. In this respect the crisis has undisputedly
been bad news for EU citizens, companies and governments alike.
However, on the other hand the economic recession that has followed
the crisis is proving to be a salutary lesson to the European Union in restoring
a certain amount of political and intellectual leadership at a time
when its influence in the world was waning. Therefore, if the Union plays
its cards rights and takes advantage of the opportunities provided by the
reshaping of the international order brought on by the crisis, it could regain
part of the ground lost in recent years. But to do so it needs to consolidate
the institutions and policies that have proved effective in addressing the
crisis and to improve those which showed and continued to show weaknesses.
It should also strengthen its external position.
Priority tasks will be to build better economic and financial governance
for the euro area, to progress in the structural reforms so as to boost
growth potential and to address the challenge of population ageing and
give fresh impetus to the Lisbon Strategy, which was renamed EU 2020
in the review of 2010. Only if the European countries foster development
and innovation policies and their companies secure international leadership
in knowledge-intensive sectors will they succeed in boosting their
productivity. To achieve these goals the European Union will at last be
able to base itself on the entry into force of the Lisbon Treaty, which
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