Mario Draghi delivered a bleak assessment of the European economy on the first anniversary of his report into improving the bloc’s competitiveness.
The former Italian prime minister and president of the European Central Bank said that the EU was in a much “harder place” now than 12 months ago. “Our growth model is fading. Vulnerabilities are mounting. And there is no clear path to finance the investments we need.”
When Draghi’s report was initially released, it was greeted with platitudes from the main EU powerbrokers. The reality was dawning that the EU was lagging the US and China, but there was no consensus on the thorny reforms needed to address the underlying competitiveness issues.
But the context was much different last September. The US was still a reliable partner that provided a crucial security backstop for the EU. It was also an important trading partner.
RM Block
Donald Trump’s re-election last November fundamentally changed that political calculus. He is, at best, transactional about EU security and Nato membership. Moreover, a key plank of Trump’s economic agenda is to slap tariffs on traditional US allies, including the EU.
The realisation in Brussels and across member states earlier this year that the EU would have to achieve economic and security independence from the US has prompted a reassessment of the Draghi report. Ursula von der Leyen, the president of the European Commission, pledged that there would be a renewed commitment to introducing its main recommendations.
However, an analysis released by a Brussels-based thinktank has found that a mere 11 per cent of Draghi’s 383 recommendations have been delivered.
The challenges facing the EU demand decisive action. The implementation of the Draghi report must become a priority. If the EU does not achieve the sum of its parts, the future will be a slide towards irrelevance on the global stage, while handing the initiative to populist insurgents at home.
