“We need a European Union that is fit for the world of today and tomorrow. What I will propose in my report is a radical change: This is what we need.” He said it Mario Draghi speaking in La Hulpe at the high-level conference on the European Pillar of Social Rights organized by Belgium’s rotating EU presidency.
“I believe that the political cohesion of our Union requires that we act together, if possible always. We must be aware that political cohesion is threatened by changes in the rest of the world”, added Draghi. “Restoring our competitiveness is not something we can achieve alone or by competing with each other. It requires us to act as the European Union in a way we have never done before,” she underlined.
“We have never had an EU industrial strategy” to respond to the United States and China and “despite the positive initiatives underway, we still lack a global strategy on how to respond in multiple sectors,” Draghi said. “We trusted in the global level playing field and the rules-based international order, expecting others to do the same. But now the world is changing rapidly, it has taken us by surprise” and others “no longer respect the rules and develop policies to strengthen their position,” he highlighted. The policies of powers like Beijing and Washington “are designed to redirect investments towards their economies to the detriment of ours or, in the worst case, are designed to make us permanently dependent on them”, Draghi highlighted, citing Beijing’s example on green technologies and “large-scale” industrial policy of the United States “to attract high-value domestic manufacturing capabilities within its borders, including that of European companies”, deploying “its geopolitical power to reorient and protect supply chains supplying”. “We lack a strategy on how to protect our traditional industries from the uneven global playing field,” the former prime minister stressed.
“Given the urgency of the challenges we face, we do not have the luxury of delaying responses until the next treaty change,” Draghi said. “To ensure coherence between different policy instruments, we must be able to develop a new strategic instrument to coordination of economic policies. And if we come to the conclusion that it is not feasible, in some specific cases we should be ready to consider moving forward with a subgroup of states, for example to move forward on the Capital Markets Union to mobilize investments”, explained the former prime minister, specifying however that “as a rule” the EU is called to “act together”.
“Our rivals are ahead of us because they can act as a single country, with a single strategy, and align all the necessary tools and policies with it,” explained the former prime minister. “If we want to match them – he urged -, we will need a renewed partnership between member states, a redefinition of our Union that is no less ambitious than what the founding fathers did seventy years ago with the creation of the European Coal Community and of steel”.
“The key point is that ‘so far’ Europe has focused on the wrong things. We have turned inward, seeing ourselves as our competitors, even in sectors, such as defense and energy, where we have profound common interests. At the same time, we have not looked outside” with sufficient attention, explained Draghi. Faced with powers like the United States and China, he noted, Europe’s response “has been limited because our organization, decision-making and financing are designed for a world before the war in Ukraine, before Covid, before the conflagration of Middle East”. “We will have to carry out a transformation of the entire European economy – added the former prime minister -. We must be able to count on decarbonised and independent energy systems and an integrated EU defense system, on domestic production in the most innovative and rapidly growing sectors, and on a leadership position in deep-tech and digital innovation.”
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