The age of global consensus has ended, demanding a new, strategic, and resilient approach to globalisation.
For decades, globalisation served as the default setting for economic policymaking. Open markets, free capital flows, and integrated supply chains were not merely policy instruments; they were articles of faith. From Washington to Brussels to Beijing, the conviction held that economic integration would deliver prosperity, secure peace, and ultimately bring political convergence. That consensus has now collapsed. What we are witnessing is not a tactical reorientation of trade policy, but a rupture in the political economy of globalisation itself.
The warning signs were always present. The 2008 financial crisis exposed the fragility of cross-border finance and the risks of deregulated markets. However, rather than rebalancing, the response was one of retrenchment. Fiscal austerity, regressive tax systems, and wage stagnation disillusioned broad segments of the population. Financialisation accelerated, inequality soared, and labour’s bargaining power eroded. The gains of globalisation increasingly accrued to capital, not to citizens.
This widespread discontent found clear political expression. Populist movements, once dismissed as fringe, became dominant electoral forces across advanced economies. They rejected the liberal economic consensus not only in tone but also in substance. From Brexit to America First, these were not aberrations; they were symptoms of a deeper crisis of legitimacy. Citizens no longer believed that free trade, open borders, and investment treaties were delivering for them.
That breakdown in trust has paved the way for a more transactional and fragmented global economy. Strategic autonomy has replaced comparative advantage. Governments are no longer optimising supply chains; instead, they are focused on securing them. The United States is decoupling from China with targeted export bans and industrial policy. Europe is scrambling to reduce dependency on authoritarian regimes through its “de-risking” agenda. India, Brazil, and other nations are leaning into protectionism. Multinational firms are actively reconfiguring global value chains. Globalisation is not ending, but it is becoming more conditional, club-based, and overtly politicised.
This is not a temporary detour. While the Covid-19 pandemic and Russia’s invasion of Ukraine did not initiate this process, they certainly accelerated it. Global supply chains buckled under pressure. Economic interdependence, once assumed to be a source of peace, was weaponised. Energy, semiconductors, and raw materials all became levers of geopolitical power. The post-Cold War illusion of seamless global flows has given way to the harsh realities of zero-sum competition.
However, the real rupture is ideological. The West’s grand bargain – the idea that economic liberalisation would eventually lead to political liberalisation – no longer holds true. China’s rise has demonstrated that it is entirely possible to integrate into global markets without converging politically. Its model of state-led capitalism, managed currency, and expansive industrial policy has outperformed expectations. The Belt and Road Initiative, alongside digital infrastructure investments and South-South alliances, offers countries a compelling alternative to the Western model.
This fragmentation comes at a significant cost. Investment uncertainty has risen, and cross-border capital is becoming more cautious. Divergent regulatory regimes are increasing compliance burdens. Technological bifurcation is accelerating, particularly in artificial intelligence, data governance, and digital infrastructure. Companies now operate in a world where geopolitical risk is no longer an abstraction, but a critical strategic variable.
More worryingly, this fragmentation is eroding our collective capacity to address global challenges. Climate change, pandemic preparedness, and digital governance all require collaborative action. Yet, cooperation is paralysed by distrust. Climate finance remains contentious, and vaccine equity is unresolved. Artificial intelligence regulation is diverging across jurisdictions, and global coordination mechanisms are either weakening or being bypassed entirely.
The policy response must begin with intellectual honesty. We cannot return to the globalisation model of the 1990s. That architecture – based on frictionless trade, deregulated capital, and just-in-time production – is unfit for today’s realities. Resilience, redundancy, and strategic clarity must be the new watchwords.
This does not imply autarky or isolation. Instead, we need a rebalanced globalisation, one grounded in fairness, reciprocity, and legitimacy. Trade agreements must include enforceable labour and environmental standards. Investment policy must shift its focus from short-term arbitrage towards fostering long-term productive capacity. Furthermore, multilateral institutions must be updated to reflect today’s geopolitical landscape, not that of Bretton Woods.
Domestically, social cohesion is non-negotiable. Globalisation without redistribution was always politically unsustainable. Public investment in education, infrastructure, healthcare, and labour market resilience is no longer a matter of ideology; it is essential for survival.
Europe has a unique opportunity – and a significant responsibility – to shape this new agenda. As a polity built on law, democratic values, and market integration, it can offer a model for a fairer globalisation. However, this requires unwavering policy coherence. One cannot call for strategic autonomy while relying on Russian gas or Taiwanese chips. One cannot preach climate leadership while importing carbon-intensive goods. One cannot demand reshoring while clinging to fiscal rules that stifle public investment. And one cannot promise simplification while hollowing out core sustainability commitments.
The age of global consensus is over. This is no reason for paralysis. But pretending we can return to the past only erodes credibility. The task ahead is clear: build a new globalisation – strategic, democratic, and resilient. Anything less invites chaos. And chaos is emphatically not a strategy.
Apostolos Thomadakis is Research Fellow and Head of the Financial Markets and Institutions Unit at the Centre for European Policy Studies (CEPS), and Head of Research at the European Capital Markets Institute (ECMI).