Image source: Profile X Ursula von der Leyen
EU, Draghi’s report to the Commissioners: “Having lost momentum and centrality, we need a roadmap to regain competitiveness”
The former president of the ECB Mario Draghi participated today in the European Commissioners’ start-of-the-year seminar which was held, behind closed doors, in Jodoignea municipality of 12 thousand souls about fifty kilometers south-east of Brussels, in Walloon Brabant, in Belgium. The president of the Commission wanted the meeting Ursula von der Leyenwhich last autumn decided to entrust the former Prime Minister with the task of drafting a EU competitiveness report, that outlines a “vision for the economy of the future”.
Draghi was invited to Jodoigne precisely to discuss that relationship, von der Leyen explained to the commissioners at the college meeting on 21 November, as reported in the minutes of the meeting published yesterday. The president today publicly thanked the former prime minister: “Thank you dear Mario – he said via social media – for the excellent exchange today with the College of Commissioners on competitiveness. We discussed many challenges and policy areas. I look forward to the report, which will help advance the debate on how to strengthen the EU economy.”
In the meeting with the European commissioners, his collaborators inform, Draghi briefly outlined the dynamics that have determined the current scenarios and prospects for European competitiveness. Starting from 2016, he observed, we have witnessed a series of new and relevant facts for Europe in the most diverse fields, from the election of Donald Trump in the USA to the forceful emergence of the green transition on the agenda of governments and organizations, up to to the much faster-than-expected advent of artificial intelligence. In this context, he underlined again, the European economy recorded a progressive weakening, losing momentum and ceding centrality in supply chainsto the benefit of other countries such as the United States and China.
The war in Ukraine, continued the former prime minister, only confirmed the fragility of the Old Continent, not only from an economic point of view, but also in terms of a geopolitical model. It follows, this is essentially the reasoning made by Draghi, the need to define a roadmap broad and detailed, which clearly identifies priorities, lines of action and policies to be implemented in the different sectors. The identification of these paths, Draghi further explained, proposing an approach dear to him, can only be based on an accurate analysis of the data.
So the report on European competitiveness, that the former prime minister is preparing on behalf of the President of the Commission Ursula von der Leyen, will be an exercise that is as open as possible to listening to all the relevant stakeholders, open to contributions from all those who are interested in making them, open to the search for incisive and ambitious solutions. What his ideas are, the former governor of Bank of Italy made it clear last September when, in a speech published by the Economist, he recalled that Europe faces a series of supranational challenges, which will require huge investments in a limited period of time: in defence, for the green and digital transition. Draghi underlined that, unlike the US which launched the IRA using fiscal leverage, the EU has no federal strategy to finance those investments.
If it does not act, he warned, Europe runs the “serious risk” of missing the climate objectives it has set itself, of failing to provide “security” to its citizens and of “losing” its industrial base, in favor of areas of the world who self-impose “fewer constraints”. Rather than giving state aid a free hand, the former ECB president argued, it would be better “redefine” the framework of the rules on the Union’s budgets and decision-making process, to make them “adequate” to common challenges. This dilemma, he continued, can only be resolved by “transferring greater spending powers to the centre”, which in turn would make it possible to have more “automatic” rules for member states.
If the EU could “federalizing” some of the investments necessary to achieve the common objectives that the Union has set itself could be able to achieve a “balance” similar to that enjoyed by the USA. Spending at the federal level, by borrowing jointly, would bring, Draghi noted, “greater efficiency” and provide “greater fiscal space”, given that the costs of servicing the debt would be lower. In this way, national policies could focus more on “debt reduction”, to obtain “buffers” in budgets for lean periods. In view of the enlargement to the east, it will be necessary to “avoid”, Draghi again warned, the mistakes of the past, expanding the periphery without strengthening the centre. A more centralized decision-making process, he continued, will involve “citizen consensus”, in the form of a “revision of the treaties”.
And so: the strategies that ensured Europe’s “prosperity and security” in the past (“relying on America for security, China for exports and Russia for energy”) have become “insufficient, uncertain or unacceptable ”. In this “new world“, he warned, the “paralysis” is clearly “unsustainable”, while the option of leaving the EU, pursued decisively by the United Kingdom, has given “decidedly mixed” results. Therefore, he concluded, “forging a closer Union will ultimately prove to be the only way to ensure the security and prosperity that European citizens aspire to”. It will soon be discovered to what extent the Draghi report will echo these concepts, which the former Prime Minister had already partially expressed when he was in Palazzo Chigi.
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