Global
Blockchain – a decentralized ledger of transactions that uses computer technology to link, secure and encrypt records – has the potential to become a hugely disruptive technology, rendering financial intermediaries unnecessary and making money transfers nearly instantaneous. However, it requires huge amounts of computing power and still cannot come close to processing the volume of transactions that modern credit card companies do, for example. But these challenges represent opportunities that are sure to be seized by a cascade of innovations.
European Union
The European Union’s inflexible budget process – constrained by seven-year Multiannual Financial Frameworks (MFFs) – has left the bloc almost incapable of handling major crises. The resort to ad hoc solutions over the past decade has only made the situation worse. Now, reformers are considering new revenue sources, and even more revolutionary steps such as EU taxes or a separate eurozone budget.
Global
The U.S. is the world’s largest open economy and pillar of the global trading system. Yet its economic challenges today – government debt, wealth inequality, and labor force participation – cannot be reliably addressed through more open trade. One should therefore expect more U.S. steps to change the terms of trade and pressure leading exporters over the next two years.
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The fragile German-French axis heads toward isolation