An IMGW.News Report:
Mario Draghi advocates significant reforms for the EU to compete with China and the US, including shared borrowing and ending national vetoes. His report proposes controversial eurobonds and defensive trade measures as part of a strategy for decarbonisation and competitiveness.
The report, presented today (9th September, 2024), was due in June and proposes a “new industrial strategy for Europe”, arguing that open, rules-based trade is fading.
“Our rivals succeed because they operate with a unified strategy and aligned policies. To compete, we need a renewed partnership among Member States—an ambitious redefinition of our Union akin to the founding of the European Coal and Steel Community 70 years ago.”
Drafted with European Commission officials, it arrives ahead of President Ursula von der Leyen’s outline of her new deputies’ roles.
Draghi recommends the EU issue common safe assets for joint investments and market integration, moving towards eurobonds. This follows the Next Generation EU plan but raises concerns about subsidising weaker member states.
Concerned about a productivity gap with the US, Draghi suggests aggressive measures against significant green tech subsidies from China and the US. He proposes defensive trade measures to balance global competition and coordinated screening of foreign investments to safeguard European innovation.
Draghi also urges the European Commission to curb excessive regulation, which he says burdens businesses. He proposes expanding qualified majority voting in the Council to reduce national vetoes on economic and foreign policy decisions.
Recent months have seen Hungary block aid for Ukraine and Estonia delay VAT reforms.
Von der Leyen aims to prioritise economic growth in her next term, following her first term’s focus on climate change, COVID-19, and the Ukraine conflict.
Mario Draghi’s proposals are consistent with his long-standing advocacy for reform and support for the EU. In a speech at the High-level Conference on the European Pillar of Social Rights (Brussels, April 16, 2024), he said:
“If we find that achieving this is not feasible, we should consider proceeding with a subset of Member States. For example, enhanced cooperation could advance the Capital Markets Union. Nonetheless, I believe our Union’s political cohesion requires us to act together, especially as global changes threaten it.
Restoring our competitiveness requires a unified European approach, not isolated actions. Our rivals succeed because they operate with a unified strategy and aligned policies. To compete, we need a renewed partnership among Member States—an ambitious redefinition of our Union akin to the founding of the European Coal and Steel Community 70 years ago.”
