A warning signal that Europe can no longer ignore

Mario Draghi has issued a warning signal that Europe can no longer afford to ignore. Without a massive increase in investment, the continent risks a slow but inexorable economic decline. In his latest report, Draghi does not merely suggest policies to boost European competitiveness, but proposes an intervention plan focused on investments and strengthening European economic governance: EUR 800 billion per year to boost industrial competitiveness and accelerate the digital and ecological transition, and a new 'competitiveness coordination framework' to address the EU's strategic priorities with the overcoming of unanimity voting in the European Council. However, this agenda clashes with a fragmented political reality that could undermine its implementation.

The outlined picture is clear and worrying: Europe has lost momentum, with stagnating productivity. While the United States and China are investing in advanced technologies and renewable energy, the Old Continent has a 'static' industrial structure that remains anchored to traditional specialisation sectors such as automotive and has difficulty in moving towards new digital-related sectors. Worsening the situation are energy costs, up to 345% higher than in the US, and the war in Ukraine, which has aggravated dependence on external energy sources, further exposing Europe's structural fragilities. Moreover, Draghi highlights Europe's dependence on raw materials such as lithium, cobalt and copper, crucial for the energy and digital transition, which are mainly supplied by non-European countries such as China. Without a coordinated strategy covering the entire supply chain, from extraction to production, the EU risks compromising its economic autonomy and security of supply, in an international context of growing geopolitical tensions.

Draghi proposes a real revolution to break the deadlock: more flexibility in competition rules to allow strategic mergers, especially in the telecommunications and defence sectors, and a unified approach to energy policies to reduce dependence on fossil fuels. He then calls for a reform of the EU budget, concentrating resources on innovation, digitalisation and green transition. Finally, it suggests, in addition to the completion of the banking union and capital market necessary to mobilise private investment, the issuance of common debt to finance strategic projects. This is where the real obstacle emerges: some Member States such as Germany and the Netherlands are, in fact, firmly opposed to the idea of shared debt, making the implementation of the plan extremely difficult.

The recent re-election of Ursula von der Leyen as head of the European Commission opens a new chapter, but challenges remain. Von der Leyen, while having consolidated centrist support, now faces an increasingly polarised European political scene, with the rise of populist and nationalist forces threatening the Commission's ability to push through ambitious reforms such as those proposed by Draghi.

Although it can count on allies like Macron and Scholz, both are politically weakened in their own countries, which makes it more complex to implement a common agenda. Added to this is the international unknown: a possible return of Donald Trump to the White House could further complicate transatlantic relations, making greater strategic autonomy for Europe crucial.