The ultimate solution to the debt crisis in the European Union will not only need a banking union but also have to involve some element of a fiscal union and a major shift of power from the national level to the European level. On the other hand, the EU budget to finance the union’s key common needs is dysfunctional today as much of it remains controlled by national and sectoral interests.

Future growth of advanced economies will depend much on increased productivity in the services sector and greater trade in services. Meanwhile, the “China threat” theory often heard in mature economies can in fact be a mere reflection of their own problems.