George Papaconstantinou and Jean Pisani-Ferry, "New World New Rules: Global Cooperation in a World of Geopolitical Rivalries" (Agenda, 2024)

Summary

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Episode Summary:

Podcast: New Books Network
Title: George Papaconstantinou and Jean Pisani-Ferry, New World New Rules: Global Cooperation in a World of Geopolitical Rivalries
Host: Leo Bader (New Books)
Guest: George Papaconstantinou
Date: September 17, 2025

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Overview

This episode features a deeply insightful conversation with George Papaconstantinou, former Greek finance minister and co-author (with Jean Pisani-Ferry) of New World, New Rules. The discussion critically examines the urgent and growing need for global collective action—on issues ranging from climate change to internet governance—in an era marked by geopolitical fragmentation and rivalry. Drawing from economics, law, and political science, Papaconstantinou illuminates why the multilateral post-WWII order is eroding, the limitations of current international institutions, and how the world—particularly Europe—might still salvage cooperation through pragmatic, club-like approaches.

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Key Discussion Points & Insights

1. Diagnosing the Global Cooperation Crisis

[02:23]

• The authors identify a “fundamental mismatch” between the need for global collective action and a declining willingness of states to cooperate.

  “We cannot solve issues that range from climate action … to dealing with data governance and Internet governance … all the way to tax coordination without mechanisms for cooperation. So collective action is lacking.”
  — George Papaconstantinou, [02:23]

2. The Need for an Integrated, Interdisciplinary Approach

[04:07]

• Papaconstantinou argues that economic, legal, and political lenses alone are insufficient for understanding or solving these challenges.
  • Economists analyze incentives/disincentives; legal scholars highlight the importance of norms and formal/informal mechanisms; political scientists foreground power relations.
  • A “much more practical approach” is needed—crossing disciplinary boundaries and resisting abstract, theoretical silos.

  “You need a much more granular, practical approach that is not kind of hamstrung by particular starting points that relate to disciplines and that addresses the real problems.”
  — George Papaconstantinou, [04:07]

3. The Fraying Architecture of Postwar Globalization

[06:02]

• The economic order since WWII brought growth, rising incomes, and poverty reduction but also created winners and losers, driving backlashes like the retreat to protectionism.
• The rise of emerging powers (China, India, Brazil) shifts the geopolitical balance and calls into question systems/dominance built by and for the West.

  “It is not a terrible surprise that other countries come and question some of these norms, and ... their role in it.”
  — George Papaconstantinou, [07:44]

• New global challenges—climate, health, digital—never fit into post-war institutions.

4. Key Turning Point: The US as Both Architect and Challenger

[09:24, 22:37]

• The definitive shift is marked by the Trump administration’s distancing from multilateralism, but dissatisfaction predates Trump (e.g., US critiques of WTO).
• US now actively challenges the system it built, pulling out of WHO, WTO, Paris Agreement, etc., and prioritizing a transactional “America First” agenda.

  “The US has been the architect of the post World War II multilateral order … But now it is no longer a guarantor. Now it is a challenger to the system.”
  — George Papaconstantinou, [22:37]

• This leaves the global order at a pivotal moment, with much of the world needing to respond and adapt.

5. Categories of Policy Challenges

[12:19]

• The book categorizes global cooperation needs into three:
  1. Global Public Goods: Climate, health, digital/data governance.
  2. Traditional Economic Interdependence: Trade, finance, IMF, WTO.
  3. “Behind the Border” Issues: Taxation, banking, competition—matters traditionally seen as sovereign but now interlinked globally.

6. Why Cooperate on “National” Issues?

[16:57]

• Global spillovers make issues like banking regulation and tax coordination inherently international, despite sovereignty instincts.
  • Lax regulation in one jurisdiction can trigger worldwide financial crises.
  • Tax evasion (by individuals and especially corporations) necessitated global action—some progress made (e.g., ending bank secrecy, G20 action post-crisis), but large-scale multinational corporate tax regulation remains elusive.

7. Dilemma of Differing Value Systems

[21:46, 22:37]

• Western norms no longer define universal values; the rise of China, India, etc., entrenches pluralism.

  “We can forget about the universalist dream for some time now. … The idea … of everyone converging to some Western liberal values … has died for good.”
  — George Papaconstantinou, [22:37]

• The US withdrawal further complicates compromise, making club-based, issue-by-issue coalitions (“coalitions of the willing”) necessary—especially in climate, where the rest of the world (Europe, China, others) could lead even if the US abstains.

8. Europe’s Unique Role and the Concept of ‘Strategic Autonomy’

[30:17]

• Europe is portrayed as the last major actor “that actually continues to believe in the rules of a global world order”—and not out of idealism, but necessity.
  • Must balance simplification, rationalization, and regulatory autonomy while avoiding both American and Chinese dominance.
  • Strategic autonomy means negotiating power, upholding values (e.g., privacy, tech regulation), and building internal capacities (e.g., capital markets for AI and tech innovation).

9. Reforming International Institutions—Second-Best Pragmatism

[35:05]

• Existing bodies (WTO, IMF, World Bank) should be improved through “second best” solutions—working within existing principles as much as possible, while forming “club-like” alternatives where needed.
• To sustain legitimacy, Europe (and by extension, the West) must give rising powers a greater voice—e.g., adjusting IMF voting shares so that India (with a much larger population than Italy) has appropriate sway.

  “You give them a share of running these organizations and you give up some of the spots that you’ve got for European [countries]. That’s part of how you have to do it.”
  — George Papaconstantinou, [37:47]

10. Principles for Navigating the New Disorder

[38:50]

• The book ends with 10 practical rules for advancing global cooperation:
  • Look for “second-best” solutions—pragmatism over perfection.
  • Engage private sector and epistemic (expert) communities, but be ready to confront interests when they diverge from the public good.
  • Use civil society and informal networks where formal institutions falter.
  • Accept the enduring challenge posed by nationalism and nativism.
  • Political courage is needed to explain and sell collective sacrifices for the greater good.

  “We are seeing a return to nativism, we’re seeing a return to nationalism. Even within Europe, it is often very hard for countries to share and to understand that the collective good implies compromises and that you have to sell this to your citizens.”
  — George Papaconstantinou, [39:50]

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Notable Quotes & Memorable Moments

• On the Shift in the US Role:

  “The US has been the main guarantor of that system... But now it is no longer a guarantor. Now it is a challenger... officially saying that the world governance system is an instrument that works against the US.”
  — George Papaconstantinou, [22:37]

• On European Strategic Dilemma:

  "How do you find this space ... to dictate your own norms ... without completely alienating partners? It's a mix of principles and practicality of negotiation and values, hopefully without compromising the basic issues around which we have built Western democracies."
  — George Papaconstantinou, [31:55]

• On International Institutions and Sharing Power:

  “You give them a share of running these organizations and you give up some of the spots that you’ve got for European [countries]. That’s part of how you have to do it.”
  — George Papaconstantinou, [37:47]

• On Practical Optimism vs. Realism:

  “We are perhaps at the worst point because of the tariffs and because of the violence with which the new US Administration has attacked all of these institutions. I would like to think that this is going to start ebbing a little bit … but we can’t stay still and just wait.”
  — George Papaconstantinou, [39:55]

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Key Timestamps

• 02:23 – Diagnosing the “fundamental mismatch” in global governance
• 04:07 – The necessity of interdisciplinary analysis
• 09:24 – The turning point: Trump & US reorientation
• 12:19 – Policy challenge typology: public goods, interdependence, “behind the border”
• 16:57 – The rationale for international banking/taxation cooperation
• 21:46 – Emergence of rival value systems and end of Western universalism
• 22:37 – US as a challenger to the post-war order
• 30:59 – Europe’s strategic “third way” and autonomy debate
• 35:05 – Second-best institutional solutions; sharing global governance
• 38:50 – Ten principles for “second-best” collective action and realistic optimism
• 42:33 – The second Trump administration as a catalyst for European and global self-assertion

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Final Takeaways

Papaconstantinou's conversation provides a grounded but urgent call for pragmatic, flexible, and inclusive forms of global cooperation. As much as the hope for a seamless multilateral order has faded, the stakes—for climate, security, prosperity, and justice—demand creative alliances and a willingness, especially from Europe, to both lead and adapt. The episode makes clear that the incremental, second-best, and even informal approaches may be the only way forward in a deeply fractured world.

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Transcript

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[Leo Bader]

Welcome to the New Books Network. My name is Leo Bader and today I'm talking to George Papakonstantinou, a former Minister for Finance and Minister for the Environment, energy and climate Change in the Greek government. George is now the Chair of International Political Economy at the Florence School of Transnational Governance. George's new book, co written with Jean Pisani Ferry, Senior Fellow at Bruegel, is titled New World, New Rules. The book identifies a defining problem of the current moment, the rapidly increasing need for collective action to address global problems, coinciding with a quickly disintegrating capacity for global action. Georges and Jean approach this dilemma with a blend of social scientific disciplines, offering us a sober and practical understanding of the challenges we face and principles we can adopt to overcome them. George, it is a pleasure to be able to talk to you today.

[George Papakonstantinou]

It's a pleasure to be here. Thanks for having me.

[Interviewer]

So maybe you can start by talking a little bit about how you were led to write this book and why you found it necessary.

[George Papakonstantinou]

Well, I think the starting point was pretty straightforward. We fell together with Jean that There is a fundamental mismatch, or a gap, if you will, between, on the one hand, the real needs for collective action around a number of policy issues, especially around global public goods, but also around managing its independence, on the one hand, and on the other hand, a real reluctance and decline in the willingness of nation states to embark in such collective action through various mechanisms of international organizations, treaties, legal or informal mechanisms. So this kind of mismatch is a real problem because we cannot solve issues that range from climate action meant by diversity, to dealing with data governance and Internet governance, all the way to tax coordination without mechanism for cooperation. So collective action is lacking, and we wanted to see how, in this current environment, we could think of ways of helping collective action move forward.

[Interviewer]

And you write that there are legal, there are economic, there are political approaches to solving this lack of collective action, and that we need some sort of integrated approach that sort of incorporates all three of these elements. How might we think about constructing that kind of integrated approach? And why does thinking from one perspective alone not quite work?

[George Papakonstantinou]

So both authors are economists, so we tend to think of the problem of collective action around incentives and disincentives. Are there incentives to cooperate or disincentives to cooperate? But at the same time, we recognize that that's one way of looking at the issue. And of course, collective action depends a lot on the legal norms that are there or the informal networks that get formed next to rules that are formal. And we also understand the viewpoint of political scientists that talk about power relations. We live in a geopolitical world where, of course, power balances are very much the starting point for a lot of the problems that we're facing at the moment. So what we plead for in this book is an interdisciplinary approach and a much more practical approach, because we can see that there are areas where take health, take action. On Covid, the incentives to cooperate were huge, yet we failed in many respects. So there was something missing there. So you need a much more granular, practical approach that is not kind of hamstrung by particular starting points that relate to disciplines and that addresses the real problems.

[Leo Bader]

Well, we'll get into those approaches later.

[Interviewer]

On, but maybe first let's talk more about the problems that you identify. Since both of you are economists, maybe let's start with the economic architecture that the world has built since World War II, which has led to a lot of growth and led to a lot of liberalization, but as you write, is now being challenged and sort of seemingly ceasing to function in the way that it was intended in Many respects. So why is that happening? And in what way exactly?

[George Papakonstantinou]

So it has. Indeed it has. And since the Second World War, the expansion of economic interdependence and the growth of globalization have delivered growth, prosperity, increased incomes, reduction, poverty throughout the world. There's no doubt about that now. They have not delivered to everyone in the same way way. And there are winners and losers. Hence the backlash that we see today, and especially that we see very clearly in trade relations, with the retreat to protectionism even before the current wave of tariffs. Right. So as the world has developed and has become more fragmented and has become more polarized because of some structure shifts, like the rise of new powers such as China or the middle powers, such as India, Brazil and the others, preferences have been diverging. The view, for example, on how to protect industries or how free trade should be is not necessarily shared along these different groups of countries. So when you have a situation of geopolitical tension, of structure shifts and the rise of new powers, you inevitably. And we have seen this, have. I don't know if it's inevitable, but we have seen a challenge to the norms that have been created and built after World War II. Now, we need to be fair here and say that these norms were US and Western dictated and built in the image and with the benefit of the west first and all. They have benefited beyond the West. But it is not a terrible surprise that other countries come and question some of these norms, and they question either how the system is built or they question their role in it. Do we? For example, is it fair that India has the same share of votes in the IMF as Italy, India being so much a bigger country, and when it comes to rules around financial safety nets and the like. So we have seen over time this erosion of confidence in what was already an incomplete system of international, of governance, of international independence, and which left out some very important elements, such as global public goods such as climate and health and the Internet. And we have seen this even before the Karang break, which we'll talk about a little bit. And it has been a steady process, but now it has come to a much more pivotal moment that we need to address.

[Interviewer]

And is there any sort of defining moment that you see as where things sort of take a turn, or is it really just a kind of gradual changing of the underlying power balances of economic weight that kind of gradually has grown out of sync with the institutions and the institutional mechanisms that have been built?

[George Papakonstantinou]

There is a defining moment, and that's the election of Trump. But before we get there we need to recognize two things. One, that the system was being challenged both from the outside and from the inside. Even before the attitude of the US towards the World Trade Organization predates Trump, the US was for a long time complaining about how the WTO was working. So the challenge came from within the system, of the people who sort of created the system in the first place. Let's say it came from outside the system. Think of the role of the IMF and how Asian countries have for a long time wanted an alternative to the IMF as a global financial safety net. Right. But aside from that challenge to the main, what I would call and what we discuss in the book as the main channels of international economic independence, the system as existed had also huge gaping holes. The system was not equipped to talk about and deal with and provide collective action for climate issues. That wasn't there when this was built back in the 40s and 50s. Climate was not really a core issue, neither was health. And then we saw in Covid the need for international cooperation and the problems that the weakness of organizations such as the WHO faced. Digital and the Internet were not there. And yet we know today that some of the biggest fights are around the global rules, around Internet data, who owns data privacy, sharing the data. So it's two things simultaneously. One, the challenge around the traditional trade finance modes of governance, of international governance, global governance, and two, the holes in the old system which were never addressed in the first place.

[Interviewer]

I'm curious about, alongside national economic factors, there's of course a very important international financial system that in many ways transcends these national borders. If we look at the financial crisis in 2008, a lot of the problem was that banks had liabilities in different countries that their own countries didn't want to have to deal with, et cetera, et cetera. So how can these kind of national issues like the US not wanting to abide by the rules set by the WTO, or not wanting the WTO to have as much power, and then also these private sector issues or these financial issues that kind of intersect with traditional national economic factors, how can we think about that intersection?

[George Papakonstantinou]

So in the book, we group the policy areas that we look at in three broad categories. The first category is global public goods. And under that we put obviously climate, but also health and also digital. And again, as I just said, digital is an area in which we have some of the biggest issues with the domination of big tech, US based big tech and the challenge this poses. You can see at the moment how Europe is absolutely not willing to Play along with a rule book that would have it regulate itself with US rules on big tech, right? So that's the first big category. The second one is the more traditional trade finance. So economic independence issues. There we see the challenge to wto, we see the challenge to the IMF system. We see how a number of countries have created their own mechanisms of self insurance. Because why was the IMF created? It was created as a lender of last resort, right? But a number of countries are now self ensuring or creating regional safety nets as in Asia around China. And then there's a third kind of category which we call behind the border interdependence. And there's a question there, which is we talk about competition. Are these domestic policies or do these policies require global coordination? Talking about taxes. Taxes are the at the very core of national competence. So why do we need international tax coordination? Right? Banking again, how do we. And why would we need the global coordination mechanism for banks? And the answer to that is because there are spillovers and clear relationships. Companies are global nowadays. So how you tax a US multinational and cannot just be left out to the us it is a global issue. Hence the OECD has for a long time tried to come up with solutions to that. On competition, whether you look at the ability of a takeover or a merger, you have to address the question of how large is the market. And the market typically transcends not just a few countries, but could be global. So you need again a global mechanism. But we don't have in the way that we have the wto, we don't have a world competition authority. What we have is the relationship between individual national authorities and taxation. Already there's a lot of work being done in the oecd. So these are all issues that come outside the more traditional economic and dependent issue. That's why we call them behind the border integration. But which are clearly under the remit of some kind of a need for global rules. And where until the recent break that we have seen, we observed that despite the lack of formal rules and institutions such as the WTO or the WHO or the imf, you had some progress which was being done. You had some informal networks that were cooperating and were creating soft rules which would do doing it reasonably good second best. Now we are however now in a very different ball game.

[Interviewer]

You write that we should be aware that political factors and political imperatives will always probably prevent the most ideal solutions from coming about because politicians are not always thinking about this global imperative as much as might be perfectly rational. I'M curious about in the case of behind the border integration. What's sort of the logical case for a single nation to cooperate in restricting or in regulating things like banking or taxes on a global scale, when perhaps it's sort of easy to make the case that these are national issues and it's most beneficial to keep them on a national level.

[George Papakonstantinou]

Well, you mentioned banking and we've just gone not so long ago through a global financial crisis which was precipitated by lax regulation and regulatory forbearance. And that created a wave of banking collapses throughout the world. So it is not the case that banks are national, they're international. Most of the banks are international character. The links are both direct and indirect between countries. So how you regulate your banks is very important to me, sitting in a different country. And that has been recognized for a long time. Hence you have mechanisms such as the Basel Convention where all the banks get together and agree voluntarily on certain standards. It was harder to do it in a. So for banks, I think it has been understood for a long time for competition policy, it has been understood for a long time, especially as companies become more and more global. And this is why, for example, the European Commission has for a long time been cooperating with the U.S. antitrust Office to figure out what is a dominant position in particular markets with a firmware for us or for a European company. For taxes, it was more recent because taxes are at the core of national sovereignty and taxes for individuals were very jealously guarded as a national competence. But people quickly realized that, especially in the financial crisis, that tax havens were politically disastrous for countries. And there was a political imperative and the G20 decided to go after tax havens and go after tax secrecy. And now we have a complete abolition of tax secrecy. Switzerland no longer has it and others do not. So the issue for individuals has, I would say, been solved to a very large extent. You cannot hide your money. And this was also because the US had a very strong incentive to go after people who were hiding the money from the US irs for multinationals, for corporations in general, it's much harder because for corporations it's a question of the incentives don't align. Some countries, the US being one of them, have a strong incentive to keep a system whereby US corporations can extract, let's say, value from other countries and pay less taxes there. So it has been much more elusive to find an agreement on international taxation for corporation. That has been for physical persons.

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[Interviewer]

You mentioned earlier that the norms that underpin the international system we have right now were to a large extent dictated by the US and by the West. And now clearly they're kind of running up against a world in which countries have different value systems and different fundamental norms that guide how they think about how the world should be organized, sort of trying to look into the future. How can we work on global cooperation in a world where these sort of fundamentally different value systems are here to stay and can't necessarily be papered over by some kind of universalist dream because as we see that will eventually run into some kind of hard to break resistance.

[George Papakonstantinou]

I think we can forget about the universalist dream for some time now. The idea of kind of the end of history and everyone sort of converging to some Western liberal values and a system that goes with them has died for good. Right. But what is new now is, but this has been there for, for, let's say a couple of decades for sure, right? I mean we have been seeing this, the, the, the different norms, the different values being much more vocal as the countries such as China and India and the others have risen in, in the, in the world economy. Right. But what is really different today and makes it all the more hard to find solutions that we can all agree on is the US stance because the US has been the architect of the post World War II multilateral order with the global governance arrangements that go with it. And the US has been the main guarantor of that system because of its power, because of its worldwide reach, because of the fact that the dollar is a world reserve currency, because of its position in international organization and its dominant role in those. The US has been the guarantor of the system. But now it is no longer a guarantor. Now it is a challenger to the system. The US is now officially after the. And that's the real break that I was talking about and that's the Trump administration. It is officially saying that the world governance system is an instrument that works against the US So it is no longer accepting the norms and rules as we believed in them. It has pulled out of who it has incapacitated wto. It has pulled out of the Paris Agreement for climate. It is sort of distrusting or undermining all international organizations and systems of cooperation. So it is explicitly saying that we want to replace this by a system where we put America first and where we go do bilateral deals. And the most obvious area is of course trade, where it has completely reversed a system whereby reduction of tariffs along within the WTO framework was to the advantage of everyone. So the real question is in this environment where the US no longer believes in international norms and behavior and we don't know how long this is going to last. Right. But whatever happens after the end of this four year term, we're not going to go to the status quo ante, something will remain. What will remain will be quite substantial. So the question is, what can we salvage here? And I think the answer has got to be a very eclectic one. And the question this is for the rest of the world, because the US at the moment at least has a certain worldview and it will pursue that worldview and it will try to extract as much value, let's say, as it can from the rest of the world. If you listen to the, to the Foreign Secretary or if you listen to the Treasury Secretary, you will hear language which is very different from what you have heard before. In a certain sense, a purely extractive approach of value. Right. So the question is, what does the rest of the world do? The rest of the world is already responding and it is responding. I mean, you can see how China, together with India, Russia and others are building, let's say, an alternative world governance order, which for us Europeans is problematic because it is one that is built on autocratic regimes. It has some of the right language, but we know that behind the language the reality is not exactly the same. So for Europe, the dilemma is how, in our sense, and we're both European, of course, writing this book, Europe is the last entity that actually continues to believe in the rules of a global world order. And it's not because of some romanticism. It is because we think that without such rules, you cannot address climate issues, you cannot have a fair trade environment for everyone, you cannot deal with biodiversity, you cannot avoid future pandemics, et cetera, et cetera, et cetera, etc, and therefore what we are pleading for is a club like approach. So take climate, right, the US is about 13% of global emissions. Well, there's 100 minus 13 is a significant number. So Europe could get together with China, which has decided to indeed move on those climate issues and has made the pivot to green technology and potentially other kinds for a coalition of the willing that attains climate goals. Even though we disagree on China on trade issues and we disagree on values and we have a different economic and social system. So you can find solutions which are win, win, which have, it's a positive sum on individual issues. As long as the US does not try to link all these things around a geopolitical security viewpoint. So if the US tries to tell Europe you cannot talk to China even on climate, because China is our enemy, we're all in trouble. Right? So the question that we are all trying to understand is to what extent there will be these degrees of freedom and to what extent we'll have to fight with each other and with the US to be able to advance on these issues. Health is another one. Digital is an even one. I mean, the digital is going to be a particularly hard one to come to terms with because of the dominance of the US on the one hand and the ascendance of China. And there are issues of security there, there are issues of competition, there are issues of privacy. And if it's think of privacy, right, the EU view on privacy issues completely from the US one and completely different from the Chinese one. So we need to find some compromise on rul. We are not going to be dictated US or Chinese rules on privacy in Europe. We want to have our own rules on privacy. So you probably need to come to some compromises sometimes lowest possible denominator to advance the discussion and the preservation of some global public goods wherever you can without straying too much from universal principle. If you took a look at trade, for example, the WTO system can survive even if the US does not adhere to can, Right? But it's obviously much better if the US is a believer in the system and then it gets together with the other countries to help reform it, because it's certainly not perfect even as it is.

[Interviewer]

And does this present a dilemma for the eu? I mean, if you listen to a lot of leading voices right now, there seem to be some saying we need to relax a lot of our regulation, we need to sort of make sure that we don't fall behind the US and China in terms of economic weight, in terms of security capacity. But then that obviously raises the question of what is the actual purpose of the eu and as you say, what are kind of the underlying principles that guide European life? Where can a compromise be struck that doesn't create a worst of both worlds that leaves a lot of people unhappy?

[George Papakonstantinou]

Simplification and complete deregulation are two completely different things. You obviously need to simplify, rationalize, make sure that companies can invest, make sure that they can innovate, make sure that small startups can become large companies, create a capital market that funds them, get rid of obstacles within the EU for that. And there's loads of work that the EU can do, right? In that sense, the biggest advance they could do is create the Savings Investment Union which allows for Europe wide capital markets so that the successful, let's say AI company in the EU does not have to go for funding to, to the US and can stay in Europe. So that's one thing. But the idea that you can deregulate, to allow or to conform to the regulatory desires of other countries, whether this is the US Or China, is something that Europe will strongly oppose and refuse to do. Every social entity, despite differences within it, has a certain view on how it wants to run its economic and social affairs, has a certain view on who should, own my data, what US Companies operating on European so should be allowed to do and whatnot. And Europe has 450 million citizens, so it has the way to be able to dictate some of its own terms. It's not going to be easy. It's not going to be. It will certainly it connects with other issues because we, for example, heard the US Administration saying after it concluded the US EU trade deal, saying, okay, now we want to make sure that you allow U.S. tech companies to operate as we want. So everything is interconnected. It connects to security issues because Europe is still dependent on the US for security in the UK Ukraine and war. So, you know, it's not a simple task. And these are the questions that the European leaders and European institutions are grappling with at the moment. How do you find this. And they have been encapsulated through the concept of strategic autonomy, if you will. How do you find this space, which is a negotiating space, which is an ability to do trade deals with other countries, which is an ability to dictate your own norms for things that matter to you without completely alienating partners. It's going to be, it's a mix of principles and practicality of negotiation and values, hopefully without compromising the basic issues around which we have built Western democracies.

[Interviewer]

Yeah. And clearly it's important that the EU doesn't engage in a sort of regulatory race to the bottom for fear of falling behind.

[George Papakonstantinou]

No, And I think that a regular race to the bottom does you catch up in, in. And, and let's remember, Europe is behind on. In AI, for example, Europe is ahead in clean tech, which partly, of course, is. Is related to technology itself. Right. So it is. And, and with, okay, it's, it's a, it's a broader issue. But to, to. We still don't know whether leadership in AI development is going to be as important as the use of AI throughout the economy to develop other sectors. Right. So that's another big question that we have to deal with. But for sure we are not going to go for a complete deregulation and race to the bottom to be able to catch up economically, because that's not the way to do it.

[Interviewer]

You already mentioned that the WTO could function without the US participating. I'm curious if Generally across the international forums and organizations that structure the international system, the imf, World bank, the un. What kinds of changes could we think about making that would allow them to function better? Or are they kind of outdated enough that there need to be fundamental replacements or additions? Can we tinker around the edges to good effect? Or is there a.

[George Papakonstantinou]

We can. Now let's remember these are all second best solutions, right? I mean, the first best solution is to give the WTO the tools, recreate the appellate court, which is the mechanism that adjudicates disputes, et cetera, et cetera. But you know, if the US doesn't want to play ball there, what do you do? You continue to abide by some of the principles of wto. When you do club like deals with other countries to the extent possible. So the most favored nations, the national treatment, the kind of underlying basic principles wto, you create some kind of mechanism for arbitration which mimic the WTO ones but are outside the WTO or within the WTO but do not require inner limiting. So you create a. You stay as much as you can within the principles while not being in a formal sense within WTO proper. That's just one example, right? Take climate. I think the rest of the world is staying within the Paris Agreement because it has delivered some stuff, not everything, but has delivered. And we keep pushing. Take taxes, that's a tougher one because of the cloud of US tech companies and the force of the irs. But there was an agreement on a minimum global tax. The rest of the world could honor that agreement even if the US does not, and so on and so forth. You can think of different institutions. One key thing for Europe is to accept that it has to dilute its own leadership in some of these institutions if it wants to keep the rest of the world on board. Because you can't keep telling other nations that are now much bigger that they don't have a say in running these institutions. I gave the example before of Italy having more voting power than India. Well, these kind of things cannot continue. So you've got to put that on a negotiating table and say, look to avoid these other countries creating their own rules outside the system. Do you want to keep them in? Why do you keep them in? You give them a share of running these organizations and you give up some of the spots that you've got for European. That's part of how you have to do it.

[Interviewer]

You end the book by outlining some principles that might be followed to work towards more effective collective action. So maybe we can end here by talking about some of those. And I'd also be curious to hear your personal feelings about how this might progress in the coming years, how much optimism you have.

[George Papakonstantinou]

These are very simple principles and we've talked about some of them. For example, you look for second best solutions. You keep working within the existing system and you try to improve it without being a slave to every single coma of the regulations. You engage the private sector, it's a very important ally. But if interests diverge with the private sector, you have to be ready to go at war with it. You cannot accept the regulatory void just because it fits some US big tech, right? You cannot. You work with the epistemic community. This has been one of the big wins in the climate debate that you have this body of knowledge that has keeps pushing and not everybody accepts it, right? I mean, we've had governments around the world that do not accept that we have a, a climate crisis. But you work with that, you work with civil society and you work with informal mechanisms as much as you can where the formal mechanisms do not. So these are some of the simple. We have 10 rules in the end, and these are some of. They're not nuclear science, they're practical ways of advancing in an environment that we have to be realistic, is very, very adverse to global cooperation. We are seeing a return to nativism, we're seeing a return to nationalism. Even within Europe, it is often very hard for countries to share and to understand that the collective good implies compromises and that you have to sell this to your citizens because leaders, after all, are voted by their own citizens. So it is a stretch to then tell them that no, we don't, and this is perhaps for the global good, including our country. Good means a different direction. So you need some courage, a political courage also to be doing that. On the question of whether I'm optimistic or pessimistic, we are perhaps at the worst point because of the tariffs and because of the violence with which the new US Administration has attacked all of these institutions. I would like to think that this is going to start ebbing a little bit and again, not completely reversed, but changing by the end of this term. Now, not completely, but we can stay still and just wait. We have to, at least the Europeans will have to, to do what we can to keep the rest of the world together. And that's why it's important to engage with Africa, it's important to engage with Latin America. The MERCOSUR deal that had been sitting on the shelves for a very long time finally is being concluded. And we have to engage into a serious discussion with China because China cannot be ignored. And China, yes, you cannot be blind on Chinese interests and Chinese plans. But at the same time, you have to find some common ground around issues where there is a way for a positive sum scenario.

[Interviewer]

Yeah. You mentioned America, sir. And there's a sense at least that the shock of the second Trump administration is serving as some sort of catalyst to launch into more concerted action on things that have previously been more ideas or discussions.

[George Papakonstantinou]

It was a big wake up call across a number of policy areas for Europe, from energy to security to economic independence to the role of international organizations, to how it used trade to how it used global finance, the role of the euro. Have we got all the answers? Absolutely not. Are we moving in the right direction? Yes. Are we moving it it we're moving at the pace that we should be. Absolutely not. We are still too timid. But we're also trying to understand where the US stands. And this is how you should also interpret the EU US deal. It's not a good deal because zero tariffs are better. It was a deal that was born out of necessity, which may turn out to be worse than we thought. If it is just, if it is ignored or if it does not preclude regulatory issues to come to the fore. So it's a trial and error process. It's certainly going to be an interesting couple of years ahead.

[Leo Bader]

Well, we'll end it there.

[Interviewer]

George and Jean's book can be purchased.

[Leo Bader]

Through the link on the New Books Network webpage. If you're interested in more of George's.

[Interviewer]

Writing, you can find further publications on his profile page at the European University Institute. George, thanks again for joining me.

[George Papakonstantinou]

Thanks so much. It was a great pleasure.

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