Draghi: Europe's economy before an "existential" crisis

2024-09-10 08:12:00, Kosova & Bota CNA

Draghi: Europe's economy before an "existential" crisis

Mario Draghi presenting his strategic analysis. Photo: EC

"Europe has missed out on the digital revolution brought about by the Internet and the productivity gains associated with it," finds former ECB head Mario Draghi in his report. The President of the EU Commission, Ursula von der Leyen, has authorized the 77-year-old Draghi to conduct an analysis of the EU's competitiveness. In it, Draghi draws attention to the fact that the European Union is weak in new technologies, which will promote future economic growth. Only four of the 50 largest tech companies are European firms.

In the background of the competition from the USA and China, the former prime minister of Italy, Draghi notes, that the Europeans are facing an "existential challenge". Without higher productivity Europe cannot "be a leader in the field of new technologies, nor a beacon in climate responsibility and an independent actor on the world stage". Even the European social model can no longer be financed. Writes the Italian in his strategic analysis.

Screenshot of Mario Draghi's strategic analysis. Photo: Europäische Kommission

"Massive Investments Necessary"

Draghi calls on the EU for massive investments in the economy, defense and climate protection. "Additional minimum annual investments in the amount of 750 to 800 billion euros" are also necessary, he advises. To achieve this goal, the former head of the ECB recommends taking on new debts in the community, as was done recently in the case of the coronavirus pandemic.

Even the president of the EU Commission, Ursula von der Leyen, considers the instruments for financing the community as important. But it is also possible to use the financial means of the relevant country, which includes import customs and EU quotas for plastics, von der Leyen said when asked about the resistance of the German government against new debts in the community. EU member states should decide on this.

EU Commission President Ursula von der Leyen (right) and Mario Draghi (left). Photo: Europäische Kommission

During the pandemic, the EU organized a small amount of aid financed with loans in the amount of 750 billion euros. Countries such as Italy and France have since been calling for a new package, citing increased spending on defense and climate protection. But Germany and the Netherlands consider the new debts in the community as a red line.

"Climate policy must be better coordinated"

Referring to the sectors with harmful gas emissions for the climate, such as heavy industry and transport, Draghi recommends that the EU better regulate the climate policy. If all policy measures are aligned with climate targets, it is "very likely that reducing carbon dioxide emissions, decarbonizing the atmosphere, will be a chance for economic growth," he told a press conference.

Von der Leyen wants to make the EU climate-neutral with the Green Deal program by 2050, that is, that Europe no longer emits more greenhouse gases than it can save. Before the elections for the EU Parliament, the German Christian Democrat politician von der Leyen, in June under pressure from conservatives and liberals, declared that she would make some concessions regarding the conditions set for the environment./ DW