In a future vision that Draghi drafted at the request of Commission President Ursula von der Leyen, it is stated that the EU is falling behind the United States and China in terms of innovation, productivity, and economic growth. He believes there is an urgent need for a joint European strategy to catch up on this lag.
Initially, the authoritative Draghi was to present his recommendations shortly before the European Parliament elections (end of April, early May), but postponed that until shortly before the appointment of a new European Commission. Reportedly, Commission President Von der Leyen will come forward with her first nominations for new Commissioners next Tuesday in Strasbourg.
According to Draghi, the EU must invest about €800 billion annually, which corresponds to roughly 4.5% of the EU’s annual GDP. The investments should be targeted at strategic sectors such as technology, green energy, and industrial modernization. This is necessary to be able to compete with the rapidly growing economies of the US and China.
To finance this, he proposes joint debt issuance through so-called Eurobonds. This should help to jointly finance European public spending such as infrastructure, defense, and innovation. Although such a proposal was successfully applied after the corona crisis with the European Recovery Fund, it now still faces resistance from some member states, including Germany, the Netherlands, and the Scandinavian countries, who are hesitant about incurring joint debt.
Draghi emphasizes the necessity of a strong EU on the global stage, especially economically. The EU risks being overshadowed by the US and China if swift action is not taken. Europe’s technological lag is a particular point of concern.
Only four of the fifty largest technology companies worldwide are European, while promising European start-ups often move to the US in search of better financing opportunities and market prospects. Draghi warns that Europe risks a “slow death” if it does not act quickly.
Draghi also calls for an end to national vetoes within the European Council to enable faster decisions and a more effective joint economic policy. He believes the meeting circuit and decision-making machine in Brussels must become much more efficient. Although this is often discussed every five years at EU elections, compromises and decisions on this matter rarely come about.