Draghi Calls for Radical EU Reform to Boost Competitiveness and Climate Goals

Mario Draghi, former Italian Prime Minister and European Central Bank President, calls for radical EU reform. He estimates the bloc needs an extra 800 billion euros annually to meet goals like competitiveness and climate targets.

The EU faces threats from weak economic growth and productivity compared to the U.S. and China. Draghi's report highlights the need for reduced energy prices, boosted competitiveness, and stronger defense investment.

The EU's reliance on external suppliers for critical minerals and other resources is a vulnerability. Draghi suggests developing a "foreign economic policy" to secure supply chains and reduce dependencies.

Full implementation of the single market and reforms in competition policy, especially in tech, are crucial. The EU must also address an "innovation deficit" through reforms.

To mobilize private finance, Draghi recommends transforming the European Securities and Markets Authority (ESMA) into a single regulator, similar to the U.S. Securities and Exchange Commission (SEC).

Overall, the EU needs to increase its investment-to-GDP rate by 5 percentage points annually to meet defense, digitalization, and decarbonization targets. This would require an additional 750 to 800 billion euros yearly.

The report, commissioned by European Commission President Ursula von der Leyen, aims to trigger a crucial debate. However, political fragmentation among member states makes swift action unlikely.