Mario Draghi’s anticipated report received mixed reactions, with green groups accusing him of 'dismissing the ecological crisis' and the finance industry acclaiming the bulky report’s call for 'massive investment' amid austerity fears.
ADVERTISEMENTFormer European Central Bank chief Mario Draghi called for significant additional investments up to at least €750-800bn each year — around 4.4-4.7% of EU GDP for decarbonisation, digitalisation, and defence — for the EU to catch up with global competitors like China and the US. Draghi outlined 170 proposals across several policy sectors with a particular focus on the clean and digital transitions. But how did European industry and politicians react? Euronews gathers some of the key responses to the report.
The think tankers
“The politics will be difficult when it comes to the question of money. Joint money is difficult, and joint borrowing is even more difficult,” Think tank Bruegel’s Gunter Wolff told Euronews. “The need for reform is there even if member states have vested interests and will resist,” Wolff added, dubbing the report as “a reference point” which will help frame the debate.
Linda Kalcher, executive director at think tank Strategic Perspectives said the report’s focus on a €750-800bn euros investment boost should be a “wake-up call” for all European leaders touting austerity and fiscal conservatism to help industry sectors. “EU industry needs adequate support now to regain cleantech leadership and restore its competitiveness. This is not the time for frugality,” Kalcher added.
The problem is not that Europe lacks ideas or ambition, according to think tank Groupe d’études géopolitiques.
“We have many talented researchers and entrepreneurs filing patents. But innovation is blocked at the next stage: we are failing to translate innovation into commercialisation,” the Brussels-based group reacted, adding that innovative companies that want to scale up in Europe are hindered at every stage by “inconsistent and restrictive” laws.
“Draghi makes it abundantly clear that Europe has been falling behind in any type of measure that we want to choose when we compare to other OECD economies of size like for instance the US," said Fredrik Erixon, director at the European Centre for International Political Economy.
The green lobby
Jules Besnainou, Cleantech for Europe’s executive director, praised Draghi’s report for identifying clean technologies as a key opportunity for European leadership. “The start of a new political cycle in Europe is a critical time to focus on our competitiveness,” said Besnainou.
Green groups appeared generally unconvinced with Draghi’s proposals, however.
Anouk Puymartin, policy manager at BirdLife Europe, said a stable economy was impossible without healthy ecosystems and long-term resources. Puymartin slammed the report for “framing environmental protections as a barrier to competitiveness”.
Brussels-based NGO Climate Action Network (CAN) Europe regretted the lack of “crucial elements” in the report noting the bulky work falls short of just transition proposals, being too centred on industrial competitiveness.
“The green and just transformation is Europe’s best bet for lasting competitiveness. High-quality, climate-neutral products made with fewer resources will define Europe’s economic future, creating good jobs and protecting the planet,” said Chiara Martinelli, CAN Europe’s director.
Commenting on the report, green lawmaker Bas Eickhout (the Netherlands) said the EU can’t hamper its own competitiveness by pursuing fiscal policies that entrench austerity and undermine investment and suggested the bloc “have its own resources to grow funding at the EU-level” as well as “harmonising tax policies between member states”.
The financiers
In order to close the climate investment deficit, the Institute for Climate Economics (I4CE) proposed a European Competitiveness Fund under the next long term EU budget, in response to the Draghi report.
“We urgently need to also boost successful initiatives like the EU Innovation Fund and those under the European Investment Bank, while allowing member states the flexibility to contribute more public finance toward decarbonisation and competitiveness," said Dorthe Nielsen, director of strategic engagement at I4CE.
For Wim Mijs, European Bank Federation’s CEO, the future of Europe's competitiveness hinges on a healthy banking sector. Mijs argues the bloc needs a more liquid and deeper integrated Capital Markets Union, but also a regulatory shift to foster economic growth and massive investment.
ADVERTISEMENTThomas Thaler, senior associate director at the Brussels-based consultancy APCO, questioned whether national governments — particularly from net-contributing EU member states — will be willing to either increase their national contributions to the EU budget, allow for further EU own resources or agree to issue further common debt instruments.
The techies
European telco Ericsson said the report was a “timely call to action” and that the bloc’s competitiveness would only be achieved if the market encourages investment in advanced communications infrastructure in order to close the productivity gap.
“[The report brings] into sharp focus the challenges Europe is facing and the pivotal role connectivity will play to address its competitiveness gap, as an enabler of innovation and exponential technologies like AI,” said Jenny Lindqvist, head of market area Europe and Latin America at Ericsson.
Lindqvist commended the report for “rightly emphasising” the need for facilitating consolidation in the telecoms sector and the harmonisation of spectrum pricing best practice across the EU, key factors to bring about “a true Single Market”, he said.
ADVERTISEMENT"I fully support Draghi’s vision to break Europe free from the vicious cycle of low innovation, investment, and commercialisation,” said Cecilia Bonefeld-Dahl, DIGITALEUROPE’s director general, urging lawmakers to simplify regulation in areas like artificial intelligence and privacy.
Social media platform X’s owner Elon Musk said the Draghi report was “an accurate critique” and welcomed the Italian’s review of EU regulations “to eliminate unnecessary rules” and to focus on “streamlining activity” across the bloc to revive growth and boost competitiveness.
Health
Pharmaceutical industry group the European Federation of Pharmaceutical Industries and Associations (EFPIA) said the report aligns with the industry’s ambition to once again make Europe the “go to location for research, development and manufacturing of new diagnostics, treatments and vaccines”.
EFPIA welcomed the report’s recognition for more supportive and coherent policies to prevent further erosion of the sector and reverse a trend which the group claims has seen Europe’s share of global R&D investment fall by a quarter in the past two decades.
ADVERTISEMENT“If pharmaceutical companies are to catch up and compete on a level playing field, these recommendations [Draghi report’s] should be actioned swiftly alongside a coherent and comprehensive life science strategy with dedicated oversight by the European Commission,” said Nathalie Moll, EFPIA’s director general.
Eurordis, the non-profit alliance of rare diseases, was pleased to see the report addressing several key areas crucial to the rare disease community, particularly in pharmaceutical innovation, healthcare access, and research.
“We are pleased to see the report highlight joint procurement and the need to step up cross-country initiatives for joint pricing and reimbursement negotiations for specific medicines,” said Virginie Bros-Facer, Eurordis’ chief executive, adding such steps ensure rare disease patients to have a coordinated and cost-effective access to the treatments they need.
Defence
Ignacio Arróniz Velasco, senior policy advisory, EU climate foreign policy, at the climate think tank E3G said the report was clear-eyed about how the EU’s competitiveness is undermined by drastic geopolitical changes.
ADVERTISEMENT“The EU must adapt to a world of slower trade growth, higher risks of economic coercion, tensions between the US and China, and growing security and defence threats,” said Velasco, adding EU foreign and industrial policy need to work together – as they do already in Washington and Beijing.
“Mr Draghi hints at how new foreign policy tools like industrial partnerships or critical raw materials diplomacy can enhance EU competitiveness. But he does not reflect how they can navigate a challenging, multipolar context in which the EU’s diplomatic weight is decreasing,” added Velasco.
The Brussels-based German Marshall Fund (GMF US) of the US said the Draghi report’s recommendations “stand a better chance of success if they receive transatlantic support”.
“The EU, in any case, will not be able to implement such a bold agenda without partners,” said GMF US’ Penny Naas, suggesting the EU find common areas of interest with the US in their individual competitiveness agendas.
ADVERTISEMENTBiotechnology and defense, noted in the report, are areas of potential joint transatlantic work, Naas said.
“Aerospace is another obvious sector, and the transatlantic partners should develop a joint strategy to maintain Boeing and Airbus’ dominance in large civil aircraft,” Naas added.