Geopolitical volatility and risks are on the rise. These risks can materialize with shocks to key economic variables, such as terms of trade, external or domestic demand, or market confidence, affecting economic growth, borrowing conditions, public revenue and spending, and ultimately   public debt. In an increasingly power-driven global landscape, Europe must assume greater responsibility for its own security and strategic interests. Building resilience to shocks, reducing external dependencies, modernising production and investing in defence come on top of existing long-term challenges such climate change and population aging. To address these challenges Europe needs more agile institutions, better coordination in research and innovation, and stronger government support. At the same time, debt levels are already high and borrowing costs well above those seen until before the 2021-22 inflation surges. […]