The economic dynamics of globalisation have intensified not only the transnational flows of cultural goods, media products and information, but also human transnational migration. New forms of mobility have created new kinds of cultural juxtapositions, encounters and exchanges which have resulted in greater and more complex patterns of diversity within the European cultural space. Because these new forms of diversity and complexity are transnational and transcultural in their nature - functioning across national frontiers - they present a challenge for national policy frameworks. The established national mechanisms through which European states have hitherto managed cultural policy diversity and citizenship must now be supported by international or transnational strategies. The Council of Europe, which has for so long championed cultural co-operation as a mechanism for sustaining democracy and equity in cultural exchanges, has a new role to play in the transnational policy landscape. The challenge, at the beginning of the 21st century, must be to develop a democratic transnational and transcultural approach to cultural diversity policy in Europe. The Council of Europe has both the mandate and the experience to broker this.