Future is Blue

In this episode of Future is Blue, Carlos Carnicero Urabayen speaks with Ignacio García Bercero (Bruegel) and Miguel Ángel González-Simón about why trade has become a key stress test for Europe in 2026. They discuss rising transatlantic tensions, the use of tariffs as economic coercion — drawing on García Bercero’s recent Bruegel article — and the EU’s capacity to respond using existing trade defence tools. The conversation also explores Europe’s fragile economic resilience, the impact of uncertainty and trade fragmentation on investment and productivity, and the priorities for the year ahead, from advancing key trade agreements to strengthening the EU single market.

As 2025 draws to a close, Europe faces a harsher global environment shaped by a more assertive second Trump administration, intensifying economic pressure from China, and persistent internal weaknesses. In this episode of Future is Blue, Iain Begg (LSE) and Raymond Torres (Funcas) argue that Europe’s response over the past year has been largely defensive, constrained by fragmented leadership, stalled internal reforms, and a governance model ill-suited to a world increasingly driven by power and coercion rather than cooperation. They discuss how Trump’s use of “sharp power,” China’s growing trade imbalance with the EU, and Europe’s failure to translate diagnoses such as the Draghi report into action have left the bloc vulnerable. Looking ahead to 2026, both see cautious grounds for optimism — from easing financial conditions to renewed fiscal space — but stress that progress will depend on Europe’s ability to act collectively, particularly in areas such as defence, technology, and capital markets, rather than continuing to rely on national solutions in a geopolitical world.

In this episode of Future is Blue, Carlos Carnicero Urabayen speaks with Guntram Wolff, Senior Fellow at Bruegel and Professor of Economics at the Solvay Brussels School of Economics and Management, about why Europe is facing a decisive turning point on defence and security. The conversation explores how Europe has underestimated Russia’s capabilities, the growing risks created by dependence on US high-tech military systems, and the implications of a more uncertain transatlantic relationship. Wolff argues that Europe needs a credible “Plan B”: deeper defence cooperation, more coordinated procurement, investment in new military technologies, and sustained support for Ukraine as a core European security interest.

In this episode of Future is Blue, economist Luca Fornaro explains how fiscal policy shapes long-term productivity through public investment, taxation and aggregate demand, and outlines the risks of “fiscal stagnation traps” in high-debt countries. Miguel Ángel González-Simón adds the European perspective, discussing the limits of the EU’s fiscal architecture and the challenges facing Spain. The conversation then turns to trade policy, with Fornaro detailing how tariffs and global tech competition affect the geography of innovation, and González-Simón examining Europe’s dilemma between strategic autonomy and openness. Together, they unpack what Europe must do to revive productivity and stay competitive in a shifting global economy.

IMF’s Romain Duval joins Future is Blue to unpack Europe’s widening productivity gap with the U.S., Spain’s specific challenges, and the three priorities he says can reignite growth: finance, skills, and market integration.