Draghi Warns EU is Lagging Behind Rivals in Competitiveness, Reports Reuters

By Philip Blenkinsop

BRUSSELS – The European Union is lagging behind global competitors due to insufficient innovation, elevated energy costs, and skill shortages, according to former European Central Bank president Mario Draghi. He shared these insights with policymakers as he prepares to release a significant report on the subject.

A year ago, the European Commission tasked Draghi with evaluating how the EU can maintain a competitive green economy capable of contending with China and the United States amid rising global tensions. Draghi, who has also served as Italy’s prime minister, is set to unveil the report on Monday, which is expected to shape the discourse surrounding EU competitiveness—one of the key priorities for the forthcoming European Commission set to take office later this year.

During a closed meeting with EU ambassadors and leaders from various groups in the European Parliament, Draghi discussed the hurdles confronting the bloc. Sources revealed that while he faced numerous inquiries, he refrained from disclosing specific solutions included in his report.

According to EU diplomats, Draghi emphasized the necessity for the EU to accelerate the digitalization of its economy. He indicated that the "radical change" he is advocating for would require significant involvement from the private sector and unprecedented collaboration among EU institutions.

The forthcoming report, anticipated to be around 400 pages long, will examine the EU’s productivity deficit relative to its competitors and discuss the need to decrease dependencies on critical resources from countries like China, particularly regarding battery minerals. Additionally, it will address the challenges posed by climate change.

The report is set to conclude with recommendations relevant to ten major economic sectors. Draghi has previously stated that the EU must respond more adeptly to competitors who are operating outside traditional global frameworks to enhance their competitive standing, urging a shift in focus from internal EU competition to global challenges.