The drastic remedy recommended by Mario Draghi to boost Europe’s competitiveness

Europe is losing its economic position in relation to the United States and is increasing its dependence on China, according to the former president of the European Central Bank (ECB). Mario Draghi estimates the investment needs at several hundred billion.

Mario Draghi published a report on Europe’s competitiveness on Monday, September 9. The former president of the European Central Bank (ECB) is sounding the alarm: if the old continent does not want to fall behind, it must invest massively. Some 800 billion euros more per year is the amount recommended by Mario Draghi to stop the decline, the slow fall of Europe in the face of the United States and China. Eight hundred billion euros represents five percentage points more of European GDP. A level not seen for just over 50 years. Without which, there will be no miracle, according to the Italian, who became known in 2012 for defending the euro. Europe will not be able to become a leader in new technologies, be a model of climate responsibility, or finance its social model at the same time. In short, our survival depends on it. “It’s an existential challenge”assures Mario Draghi.

In his 400-page report, Mario Draghi delivers more than 170 recommendations, with numerous reforms. It is impossible to detail them all, but we can cite in broad outline: accelerate innovation to bridge the gap with the United States and China, set up a major common plan to decarbonize our economy and secure our raw materials, and avoid strategic dependence. Europe has started to do this with battery gigafactories, but we must go further, according to him, with the creation of an energy union. He also puts forward another idea: change European governance, to put an end to political burdens.

Mario Draghi advocates tackling standards. This is a frequent criticism of Europe. Too many laws, rules, bureaucracy kill innovation, creativity, and freedom to undertake. Proof of this is that a third of European start-ups worth more than a billion dollars end up leaving, often for the United States. Hence the idea of ​​easing competition rules, in particular by authorizing mergers in strategic sectors, including telecoms, defense, and artificial intelligence. In the name of competition, Europe often prevents mergers that could create European flagships. Rather than preventing them from the outset, we should let them happen and see what happens later, says Mario Draghi.

These recommendations seem difficult to implement, because politically, there is a blockage. Certainly, Ursula Von der Leyen, the President of the European Commission, who commissioned the report, promised Monday that these recommendations would inspire her second term, but the political leaders Olaf Scholz in Germany, like Emmanuel Macron France, are weakened, little inclined, little equipped to weigh in for a major recovery plan or for a large loan, as was done during Covid. Moreover, to find the money, in a period of budgetary scarcity, no leader will want to appear as authorizing new spending.