The report analyses globalisation and the policy challenges it poses for Europe. The report comprises13 articles by European experts, the first describing the globalisation phenomenon and itsconsequences in the light of latest economic research, followed by three commentary articles tosupplement the globalisation analysis. EU competitiveness and EU countries? structural policy are thensurveyed in general. Two articles examine the EU internal market, while four articles analyseinnovation policy widely. The final two articles discuss political governance of global and Europeaneconomic policy issues.