2024-09-09 17:48:11
September 9, 2024
19:48
Mario Draghi calls for Europe to deploy massive public investments. Is the Union ready for it?
In 2012, Mario Draghi saved the euro by announcing that the European Central Bank would do what it took, “Whatever it takes”, to counter the markets’ attacks on sovereign debt. Standing ovation. Twelve years later, the Italian presents in a 400-page report his recipe for saving Europe – or at least its competitiveness, therefore its economy, therefore its social model. In a word? Whatever it takes, again. Except that, this time, it is not a question of printing money, but of mobilizing public investments on the right scale.
Alongside its two major competitors, the United States and China, the European Union has seen its economy shrink for years. It needs a triple boost: investing in decarbonisation, in the digital economy, and – thank you Putin – in its defence capabilities. In total, the Union should invest 5% of its gross domestic product per year, or roughly 800 billion euros. A considerable effort, not seen for at least half a century.
Failing that, Mario Draghi promises Europeans and their social model “a slow death”.
Rigor and strategy
Twisting the neck of a canard often brandished by “frugal” Europe, Draghi warns that private money alone will not work miracles. Yes, the capital markets union is an essential project to mobilize Europeans’ savings, but it will not be enough. Public authorities must invest, and for this, member states should be able to raise new loans jointly – in the service of pan-European projects.
If rigour is required in the use of public spending, investing together in the future, in the future prosperity of Europe, is the most effective way of nurturing a virtuous cycle on the Old Continent.
At a time when Ursula von der Leyen is preparing to present her new Commission, and when Europe is entering a new legislative cycle, Mario Draghi is putting his foot down, rekindling the eternal controversy that pits, like the grasshopper and the ant, the defenders of the common account against the promoters of clearly separate accounts.
He is right. Because if rigour is required in the use of public spending, investing together in the future, in the future prosperity of Europe, is the most effective way to feed a virtuous cycle on the Old Continent. But for this to happen, Europeans must agree on a shared diagnosis (Draghi provides a good outline) and a common strategy for moving forward.
The alternative is to continue the current trend: let the single market disintegrate under the effect of state aid mobilised here and there, without a successful strategy. And let the Union sink into a series of small nationalist withdrawals that will drag it down. Europe is a powerful tool at the service of its states – and therefore its citizens: it is up to them to see if they want to seize it to bounce back.
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#Invest #perish #Europe #crossroads
What are the key recommendations in Mario Draghi’s report on boosting European competitiveness?
Mario Draghi’s Urgent Call for European Competitiveness: Massive Public Investments Needed
On September 9, 2024, Mario Draghi, the former Prime Minister of Italy and President of the European Central Bank, presented a 400-page report on the future of European competitiveness [[1]][[2]]. The report, commissioned by the European Union, outlines a comprehensive strategy to boost the EU’s economy and competitiveness in the face of growing global challenges.
A Triple Boost for the EU Economy
Draghi’s report highlights the need for a triple boost to the EU economy, focusing on investments in decarbonization, the digital economy, and defense capabilities [[3]]. The report suggests that the EU should invest 5% of its gross domestic product (GDP) per year, approximately 800 billion euros, to achieve this goal.
The Need for Public Investments
Draghi’s report emphasizes that private money alone will not be enough to drive growth and competitiveness in the EU. Public authorities must invest in pan-European projects, and member states should be able to raise new loans jointly to support these efforts [[3]].
Rigor and Strategy
The report stresses the importance of rigor and strategy in using public spending to drive growth and competitiveness. Draghi warns that without a concerted effort, the EU’s economy and social model will face a slow death [[1]].
Implementing the Draghi Report
To implement the Draghi report, Ursula von der Leyen, the President of the European Commission, will need to convince member states to cooperate and invest in joint projects. This will require a significant effort from all parties involved, but the reward will be a more competitive and prosperous EU [[2]].
Conclusion
Mario Draghi’s report is a wake-up call for the EU to take action to boost its competitiveness and economy. The report’s recommendations are ambitious, but necessary to ensure the long-term prosperity of the EU and its citizens. It is now up to EU leaders to work together to implement the report’s findings and drive growth and competitiveness in the region.
References:
What are the key components of Mario Draghi’s investment plan to enhance Europe’s competitiveness?
Mario Draghi’s Call to Action: A Massive Investment Plan to Save Europe’s Competitiveness
On September 9, 2024, Mario Draghi, the former Prime Minister of Italy and President of the European Central Bank, presented a 400-page report outlining a comprehensive plan to boost Europe’s competitiveness [[1]]. This report comes at a critical juncture, as the European Union has seen its economy shrink in recent years, struggling to keep pace with its major competitors, the United States and China.
The Recipe for Success: A Triple Boost
Draghi’s report highlights the need for a triple boost to revitalize Europe’s economy. This includes investments in decarbonization, the digital economy, and defense capabilities [[2]]. The plan requires a massive investment of 5% of the EU’s gross domestic product per year, approximately 800 billion euros, a significant effort not seen in at least half a century.
Rigor and Strategy: The Key to Success
Draghi emphasizes that private money alone will not be enough to drive growth. Public authorities must invest in pan-European projects, and member states should be able to raise new loans jointly to support these initiatives [[3]]. This approach requires rigor and strategy, as Draghi warns that “a slow death” awaits Europe if it fails to adapt and invest in its future.
The Consequences of Inaction
The consequences of inaction are dire. Draghi’s report paints a stark picture of a Europe in decline, with a shrinking economy and a loss of competitiveness. The social model that underpins European society is at risk of being eroded, and the consequences of inaction will be felt for generations to come.
Implementing the Draghi Report: A Call to Action
The onus is now on Ursula von der Leyen, the President of the European Commission, to implement the Draghi report’s recommendations. This will require convincing member states to invest in pan-European projects and work together to drive growth and competitiveness. The fate of Europe’s economy and social model hangs in the balance.
Mario Draghi’s report is a clarion call to action, urging Europe to invest in its future and competitiveness. The consequences of inaction are too dire to contemplate, and the fate of Europe’s economy and social