The diagnosis is clear: the EU is lagging behind the United States and China. From there, the recipes to overcome this situation are multiple, varied and complex in their application. Especially the one that concerns the financing of the plans. But carrying out a “massive injection” of funds, like the Marshall Plan of the last century, is a fundamental starting point for the former president of the European Central Bank Mario Draghi, that the president of the European Commission, Ursula von der Leyen, has ordered a recipe for what will be the main axis of her second term: strengthening the competitiveness of the continent.
“Super Mario” worked closely with senior officials from the European Commission itself to prepare the report, in which he proposes an injection of €750 billion to €800 billion per year to position the EU to compete with other major powers. “To digitalise and decarbonise the economy and increase the EU’s defence capacity, total investment relative to GDP will need to increase by around 5 percentage points of EU GDP per year, up to the levels of the 1960s and 1970s,” the report said. Draghi presented Von der Leyen on Monday.
These amounts are similar to those agreed by the leaders of the 27 for the post-pandemic recovery and resilience mechanism. Brussels is counting heavily on these plans, which have a five-year implementation period (between 2021 and 2026), for the EU’s competitive capacity in the face of the fierce rivalry that has recently widened the gap with the United States and China.
But Draghi also calls on the 27 to act together and not go it alone on industrial policy. “Member states are already acting individually and industrial policies are multiplying. But it is clear that Europe is not up to what we could achieve if we acted as a community,” says the document, which sees the dismemberment of the single market as a weak point as well as the administrative obstacles that Brussels has already encountered. faced.
“Europe does not coordinate where it matters. Today, industrial strategies – as in the US and China – combine several policies, from tax policies to encourage domestic production, to trade policies to penalise anti-competitive behaviour, to foreign economic policies to secure supply chains. In the EU context, linking policies in this way requires a high degree of coordination between national and European efforts. But because of its slow and fragmented policy-making process, the EU is less able to provide such a response,” the report notes.
“Europe is wasting its common resources. We have great collective purchasing power, but we dilute it in multiple national and European instruments,” criticises Draghi, who gives as an example the need to join forces in sectors such as Defence. After the Russian invasion of Ukraine, the EU, born from a European peace project, began to promote measures of this type, such as the joint purchase of arms.
