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Globalisation is more an opportunity than a menace and the European social model is not doomed. Globalisation is not a zero-sum game but there are undeniably adverse consequences. As a phenomenon of the late 20th and early 21st centuries, there can be little doubt that globalisation is something that resonates widely. But it is not easy to pin down conceptually or empirically. In fact, many of the fears surrounding globalisation are greatly exaggerated and even where justified tend to rest on an incomplete analysis of the process. It follows that to view globalisation as an inexorable and threatening force is simply unwarranted. The policy challenges of globalisation can be grouped under three main headings: equipping the economy to compete in the globalising age; smoothing adjustment; and improving socio-economic governance. Globalisation will increase uncertainties but policy measures should favour the capacity to adjust. Finally, globalisation is not the only rationale for reinventing the welfare state and the challenge for policy-makers is to respond to new paradigms and associated risks by reconfiguring it in ways consistent with the values espoused by the European social model.