The EU is outlining a strategy to compete with the United States and China. The community bloc wants to revive its industry, strengthen its competitiveness and give wings to its strategic autonomy to keep the economic pulse. Former Italian Prime Minister Mario Draghi expresses a sense of urgency in his report on the bloc’s competitiveness; if the EU does not act now, it will face a “long agony,” he told a news conference. His prescription offers a list of policies that include improving access to finance for businesses, tax cuts on the lowest wages, take innovation into account in competition decisions,
In the report that the President of the European Commission, Ursula von der Leyen, commissioned from the former President of the European Central Bank, the need for the EU to improve in terms of innovation is evident and, with it, the development of the high-tech industryas. One of the sectors in which the competitiveness gap with the United States is most pronounced.
The former Italian Prime Minister highlights other duties of the bloc: the need to update training and fill the shortage of qualified personnel, to stimulate investment, to improve competitiveness and to strengthen governance at Community level. “It is natural that when we talk about competitiveness, people think of lower labour costs, lower wages, more flexibility. It is normal that people think in these terms, but there is nothing like that in this report,” ” Draghi stressed.
“We propose the interruption of the exemption from state aid,” Draghi said he would appeal for spending discipline and ask governments to limit the aid they provided after the energy crisis. Instead, he called for using these funds only for projects of common interest at the European level or to finance cross-border initiatives.
Among the policies proposed to promote the European innovative ecosystem, the report talks about improving access to financing for startups and disruptive companies, reducing the tax burden on employees’ earned income. with average and low wagesincreasing the amount allocated to research and technological infrastructure, a unitary patent system for all Member States or more favourable regulation for innovative companies.
Considering that the lack of qualified professionals will become an endemic problem in the coming years, Draghi advocates the creation of a collaborations between Member States, Social agents and businesses must identify the skills that will be needed and establish a plan based on incentives, not obligations.
Harmonize study qualifications at European level, rethink policies to promote adult education, Focus on the lack of qualified personnel in the value chain or attracting more workers from outside the EU are some of the elements mentioned by Draghi in his report.
As for investment policies, the main instrument mentioned in the report is a new issuance of common debt, similar to the Recovery Plan to emerge from the pandemic.
In terms of competitiveness, Draghi proposes to encourage the adoption of European standards through state aid, by giving greater value to the innovative aspect in manufacturing. Competition in corporate mergers and acquisitionsreform the concept of projects of common interest at European level or speed up decision-making processes to give predictability to markets.
“The competitive advantage that Europe enjoyed 20 years ago has disappeared.“, said the Italian, when asked about competition with China. However, large packages of subsidies at the expense of taxpayers are not a valid formula for the EU, unlike Beijing, so ensuring the supply of certain goods and raw materials and ensuring that production in Europe is part of the answer to relaunching the economy.
