EU needs coordinated industrial policy to compete – Draghi

The European Union needs coordinated industrial policy, faster decision-making, and massive investments to stay competitive with the United States and China, former European Central Bank chief Mario Draghi said in a long-awaited report on Monday.

Draghi emphasised that the EU requires €750-800 billion ($829-884 billion) in annual investment, equivalent to up to 5 per cent of GDP, far exceeding the 1-2 per cent seen during the Marshall Plan after World War II.

Draghi warned that Europe’s growth has been slowing for a long time and highlighted challenges, including a reduction in world trade, a less open China, and the loss of cheap Russian energy.

He called for refocusing the EU on the most pressing issues, promoting qualified majority voting, and exploring new common funding sources, particularly for energy and defence projects.

The report also pointed to fragmentation in the EU’s single market and slow decision-making as limiting its global competitiveness. Draghi urged more innovation and energy price reductions while decarbonising and reducing dependencies on essential minerals, particularly from China.

Attribution: Reuters

Subediting: M. S. Salama