What to know about Mario Draghi’s competitiveness report

What to know about Mario Draghi’s competitiveness report

On September 9, 2024, Mario Draghi released a report titled “The Future of European Competitiveness”. In 400 pages, Draghi warns that persistent slow growth threatens European prosperity and social welfare, outlying how the EU can finance and coordinate policies to remain competitive globally.

“We have reached the point where, without action, we will have to either compromise our welfare, our environment or our freedom”, Draghi states.

Draghi’s document recommends both sectoral (i.e. energy, pharma, AI, transport) and horizontal (i.e. innovation, skills, governance) policies to ensure the EU remains competitive with the US and China in the future.

What to do to save EU’s economy?

• EU Common Debt

Mario Draghi emphasizes that the EU must mobilize between €750 billion Euros and €800 billion Euros annually to stay competitive with the US and China. He advocates for increased common funding alongside private investment to enhance the EU’s competitiveness. Draghi also calls for regular joint EU borrowing to support the bloc’s digital and green transitions, as well as to strengthen its defence capabilities.

• Boost innovation

Europe must urgently refocus its efforts on closing the innovation gap with the US and China, especially in high-tech sectors. For Mario Draghi, innovation comes not only from supporting technologies and industries but also from investing in people’s skills and ambitions.

• More industry

A strong industrial strategy and effective coordination are essential to boosting the EU’s economy. This requires the integration of multiple policies, including tax, trade, and foreign policy.

How will this impact funding?

Mario Draghi emphasized that the EU should continue building funding on the model of the Next Generation EU (NGEU) by issuing common debt instruments to fund joint investment projects aimed at enhancing the EU’s competitiveness and security.

The report warns that if key public goods—such as energy grids, interconnections, defence equipment, and defence R&I—are not jointly financed and planned, they risk being under-supplied. Hence, EU funding is crucial to ensure these projects are adequately supported.

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