Single market, competition & trade

Despite their battered reputation, markets remain the best way of generating economic growth. But the market economy faces a crisis of legitimacy brought about by rising inequality and a breakdown of the relationship between risk and reward.

Germany has finally agreed to help bail out Greece. The negotiations were acrimonious and took months. Angela Merkel’s hesitation and prevarication have increased the cost of the bail-out and unsettled financial markets.

George W Bush convened the first G20 summit in Washington in November 2008, at the height of the global financial and economic crisis. At two further summits in 2009, G20 leaders pledged to co-ordinate their economic stimulus packages (as well as exit strategies), avoid protectionism, address global imbalances, triple the resources of the IMF, and work out stricter rules for banks, hedge funds and other financial players.

Greece’s recent fiscal travails have, slightly unexpectedly, thrown the spotlight on Germany’s current-account surplus. In mid-March, France’s finance minister, Christine Lagarde, urged Germany to do more to boost domestic demand – a call echoed by the European Commission’s president, José Manuel Barroso.

The EU's Lisbon agenda has failed to deliver what it promised. Although most member-states have made some progress towards the targets they set themselves in 2000, their commitment to reform has been half-hearted.

Unbundling the supply of energy from its transport, moving Europe towards a low-carbon energy system, and getting the Nabucco pipeline built – these were the priorities of the last energy commissioner, Andris Piebalgs. His successor, Günther Oettinger, will write his own to-do list. The EU now has a dedicated climate change commissioner, Connie Hedegard, with whom Oettinger will have to work closely.

At their summit in March, EU heads of state and government must decide what should succeed the Lisbon agenda – the ambitious programme of supply-side reforms that was launched in 2000.

In 2008, the global financial system came close to collapse. Ever since, policy-makers have been busy overhauling the way it is regulated and supervised. Will this flurry of activity produce a more stable financial system – and if it does, at what cost?