Mario Draghi, the former Italian Prime Minister and President of the European Central Bank, has presented a comprehensive report urging significant reforms within the European Union.
The report highlights the need for an additional annual investment of up to $884 billion to bolster the EU’s economic competitiveness and address key climate and geopolitical challenges.
Draghi’s study, commissioned by European Commission President Ursula von der Leyen, outlines several areas where the EU must focus its efforts to avoid falling further behind global competitors such as the United States and China. The report emphasizes the necessity for enhanced investment in energy, defense, and technological innovation to meet the EU’s goals of improving productivity, reducing energy prices, and achieving social and environmental targets.
The proposed investment surge would require an increase of approximately 5% of the EU’s GDP, bringing levels of investment back to figures not seen since the 1960s and 1970s. This proposed boost is far larger than the historical 1-2% investment seen during the Marshall Plan post-World War II.
Draghi’s report highlights the current vulnerabilities of the EU, including its dependency on China for critical minerals and the impact of losing access to affordable Russian energy. The study advocates for a more coordinated industrial policy, reduced trade frictions within the single market, and reforms to enhance the efficiency of decision-making processes.
Key recommendations include the creation of a more unified foreign economic policy, investment in critical infrastructure, and the development of new regulatory frameworks to support increased private and public financing. Draghi also suggests transitioning the European Securities and Markets Authority (ESMA) into a more centralized regulatory body to better oversee EU securities markets.
The report underscores the need for the EU to address its “innovation deficit” and improve its competition policies, particularly in the technology sector, to avoid stifling growth. It also calls for enhanced efforts to reduce trade barriers and facilitate investment in key areas such as defense and digitalization.
The Guardian, CNBC, Reuters, and Politico contributed to this report.