The European Union needs far more coordinated industrial policy, more rapid decisions and massive investment if it wants to keep pace economically with rivals the United States and China, Mario Draghi said on Monday in a long-awaited report.
The European Commission asked the former European Central Bank chief and Italian prime minister a year ago to write a report on how the EU should keep its greening and more digital economy competitive at a time of increased global friction.
"Europe is the most open economy in the world so when our partners don't play according to the rules, we are more vulnerable than others," Draghi told a news conference.
In the opening section of a report set to run to some 400 pages, Draghi said the bloc needed additional investment of €750-800 per year, up to 5% of GDP - far higher even than the 1-2% in the Marshall Plan for rebuilding Europe after World War II. "Growth has been slowing down for a long time in Europe, but we've ignored (it)," Draghi said.
"Europe is the most open economy in the world so when our partners don't play according to the rules, we are more vulnerable than others," Draghi told a news conference.
In the opening section of a report set to run to some 400 pages, Draghi said the bloc needed additional investment of €750-800 per year, up to 5% of GDP - far higher even than the 1-2% in the Marshall Plan for rebuilding Europe after World War II. "Growth has been slowing down for a long time in Europe, but we've ignored (it)," Draghi said.
"Now we cannot ignore it any longer. Now conditions have changed: World trade is slowing, China is actually slowing very much and is becoming much less open to us... we've lost our main supplier of cheap energy, Russia."
Draghi's report comes as doubts emerge over the economic model of Germany, once the EU's motor, after Volkswagen weighs its first-ever plant closures there.
Draghi said the EU was struggling to cope with higher energy prices after losing access to cheap Russian gas and could no longer rely on open foreign markets.
The former central banker said the bloc needed to boost innovation and bring down energy prices while continuing to decarbonize and both reduce its dependencies on others, notably China for essential minerals, and increase defense investment.
Draghi's report comes as doubts emerge over the economic model of Germany, once the EU's motor, after Volkswagen weighs its first-ever plant closures there.
Draghi said the EU was struggling to cope with higher energy prices after losing access to cheap Russian gas and could no longer rely on open foreign markets.
The former central banker said the bloc needed to boost innovation and bring down energy prices while continuing to decarbonize and both reduce its dependencies on others, notably China for essential minerals, and increase defense investment.
Source: Reuters
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