Mario Draghi, former European Central Bank chief and Italian Prime Minister, emphasized that the European Union (EU) must overhaul its industrial policy to remain competitive with the US and China, Reuters reports.
Draghi outlines that the EU must adopt a more coordinated industrial policy rapid decision-making, and an annual investment of 750-800 billion euros (5% of GDP) to address slow growth, trade protectionism, and rising defense costs. His report outlines necessary investments in sectors like energy, AI, and pharmaceuticals.
Draghi criticizes the EU’s current approach, citing fragmentation, complex decision-making, and varying national subsidies as barriers to effective action. He proposes extending qualified majority voting to streamline decisions and allow like-minded nations to pursue joint projects. The report also advocates for smarter regulation, such as considering innovation and security in antitrust decisions.
However, analysts are skeptical about the EU’s ability to implement these reforms due to political divisions and institutional hurdles. Draghi’s call for increased common funding faces resistance, particularly from Germany, which is reluctant to agree to joint borrowing.
