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Former European Central Bank President Mario Draghi has just delivered a major report on the future of the European Union’s economy. Anticipated by observers, this document makes alarming observations and proposes bold solutions to revive the old continent’s competitiveness.
Draghi’s report, an electric shock to the recovery of the European economy
Draghi’s report paints a worrying picture of the EU’s economic decline. The numbers are inexorable: in two decades, EU GDP has fallen by 15% compared to that of the United States. European productivity is stagnating while its global market shares are inexorably declining.
Even more worryingly, Europe is lagging far behind in high-tech. Of the world’s 50 largest companies in the high-tech sector, only four are European. The observation is clear: the old continent missed the turning point of the last industrial revolution.
Other structural deficiencies are highlighted:
- Prohibitive energy costs, up to four times higher than in the United States
- Critical dependence of certain strategic resources abroad
- A single market that is too fragmented slows down the emergence of European giants
- Failing economic management, unable to define a coherent strategy
An ambitious action plan to remedy the situation
Faced with this alarming observation, Mario Draghi proposes a bold plan. Objective: to significantly increase the annual EU investment rate from 22% to 27% of GDP. This represents a colossal effort of €800 billion per year.
To achieve this, the report recommends three main levers:
- Increase in public investment expenditure of member states
- Mobilization of European savings for joint innovative projects
- Creation of a new community funding tool, based on the post-Covid recovery plan model
Draghi also insists on the need to simplify European economic governance and create ” Coordination framework of competitiveness » manage this strategy effectively.
If the diagnosis and proposals of the Draghi report reach a broad consensus, their implementation remains uncertain. Differences between member states persist, especially on the issue of common debt.
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