A stark warning. Mario Draghi, former ECB governor and Italian Prime Minister, delivered a stark warning to Italian lawmakers during a hearing today on his long-awaited report on European competitiveness.
- He urged urgent reforms in defence, energy, innovation, and financial governance, stressing that Europe’s prosperity and sovereignty are in serious jeopardy without decisive action.
What he’s saying. Draghi warned, “The values that built our European society—peace, prosperity, solidarity, and, alongside the U.S., security and independence—are now being called into question.”
- On defence, he called for a supranational military command capable of coordinating Europe’s fragmented armed forces, effectively creating a continental defence system independent of national priorities.
- “Europe today is more alone in international forums… and we ask ourselves who will defend our borders in the event of an external attack—and with what means?” he stressed.
Geopolitical shifts. Highlighting a shifting transatlantic landscape, Draghi pointed to changes in the US foreign policy, particularly regarding Russia, as undermining the traditional security umbrella.
- “Our security is now in doubt,” he warned, urging Europeans to fill the void left by a retreating American presence.
- He argued that the new US administration’s directives have dramatically reduced the time available to act.
Economic pain and fragmentation. Draghi lamented Europe’s economic stagnation and structural weaknesses, exemplified by the €500 billion savings that left the EU in 2024 alone.
- “We have a single market for toothpaste, but not for artificial intelligence,” he scathingly observed, criticising excessive, fragmented regulations that stifle innovation and growth.
- He noted that IMF data suggest that internal regulatory barriers effectively impose a 45% tariff on manufactured goods and a staggering 110% on services.
The bottom line. High energy prices, compounded by taxation, are crippling European competitiveness, Draghi warned.
- “The survival of traditional sectors and the growth of high-tech ones, like data centres, are at risk,” he stated, arguing that cutting energy bills must be the first step in any serious competitiveness policy.
- Ultimately, Draghi asserted that common debt is no longer a choice but a necessity.
- “Some countries can’t expand their deficits, and cutting social spending would not only be politically wrong but would betray the solidarity that defines Europe. Joint debt is the only way forward.”
