The integration of the single market, the maintenance of European values, the growth of businesses, the promotion of innovation, are some of the recipes that former Italian Prime Minister Mario Draghi highlighted in his report to strengthen the competitiveness of the community block. But the former president of the European Central Bank warns the community bloc that cannot implement protectionist measures due to its strong trade dependence and defends the renegotiation of World Trade Organization rules.
“We cannot build a protectionist wall. We cannot and we could not do it even if we wanted to, because we would hurt ourselves,” the former president of the European Central Bank said at an event organized by the European Central Bank. think tank Bruegel this Monday in Brussels. “The EU economy is more open than any other. 50% of GDP comes from trade, compared to 37% in China and 27% in the United States,” he said to contextualize the fact that the bloc cannot implement measures similar to those applied by the EU. Washington because it would hurt him.
In an increasingly tense geopolitical context, where the EU seeks to break dependencies in sensitive sectors to avoid tensions like those experienced with Russia or persistent tensions with China, Draghi recommended “rebuilding respect for rules of the World Trade Organization. WTO)”. A priority which involves “review the WTO rules in an appropriate multilateral framework” and in conditions where the bloc continues to be “strong”.
“The first violation of WTO rules was identified in 2003 and it came from the Chinese government. This was a serious violation. Nobody said or did anything. It was a good deal at the time and it was good to ignore it,” the Italian introduced. But the fact that the EU is the “most open” economy also makes it the “most vulnerable “practices which undermine “equal opportunities”. .” “in international trade.
THE Individual EU countries are too small to compete with the United States and China, warned the Italian. With a focus on increasing productivity, he championed promoting business growth, with Europe-wide businesses participating in “an integrated single market”.
The EU’s “first line of defence”, according to the former ECB president, lies in growth and innovation, not in tariffs or subsidies. However, it recognizes the need to provide support for the European clean technology sector since it is not on an equal footing with China. Dependence on Beijing, he recalled, “is not based only on the final product or technologies, but on critical raw materials.” And given the situation that led to the war in Ukraine, it is in the EU’s interest to ensure that it does not find itself, in the energy field, “in the situation in which it finds itself found three years ago,” he said in reference to tensions with Moscow. .
Telecommunications
In its report, the Italians defend encourage business mergersparticularly in the telecommunications sector, where there are 35 large operators and 370 marginal operators compared to four and five respectively in the United States and China. To achieve this, it will be crucial to boost investment in infrastructure, broadband and 5G. “Why are we in this situation? The main answer is the great fragmentation of spectrum and national regulations, which have not been coordinated,” he explained.
This is why he recommends promoting company merger policies through the harmonization of spectrum and regulations in order to create a European telecommunications market. “Mergers must be considered based on the consumer, without harming competition,” he said.
One of the most repeated messages in Draghi’s analysis concerns the 800 billion euros of investment per year that he estimates are necessary to strengthen the bloc’s competitiveness. “This figure is conservative”he assured, “does not include climate adaptation or protection”. But acting quickly becomes an essential element of the plan: “the sooner we do it, the better,” he stressed.
The Italians rule out that this funding, which represents between 4% and 5% of EU GDP, comes from national budgets because they do not have sufficient fiscal capacity. Yes, this could come from the European budget, even if it currently represents 1% of the Community GDP. And the improbable situation, Draghi leans towards the issuance of Eurobonds.
Part of the aid available to go through this transition to clean energy must go to energy-intensive industries: chemicals, steel, aluminum and cement. “They are present in all sectors of the economy, even on the production chain. It is an asset of the defense industry,” analyzed the Italian. Even if some of these materials can be imported, Draghi believes that these industries must be established on our continent and must benefit from economic support to contribute to its decarbonization.
