Competitiveness: how can the EU catch up?
Former European Central Bank chief Mario Draghi on Monday presented a report commissioned by EU Commission President Ursula von der Leyen just over a year ago. If the EU economy is to have any chance of competing with the US and China it needs massive private and public investment and less bureaucracy, the report concludes. Europe's press analyses the proposals and their feasibility.
Keep production in Europe
In IQ, Vidmantas Janulevičius, President of the Lithuanian Confederation of Industrialists, says Draghi's plan is good, even if it comes late:
“We recognised many of the problems described 10 to 15 years ago. Back then, there would have been time to prevent some of the consequences, but short-term profits always took precedence over long-term investments in a sustainable future. ... Draghi's report emphasises that beyond developing technologies we must also ensure that they are produced in Europe. If we don't, our competitiveness will continue to shrink. We need to bring production and technology back to Europe, because our competitive advantage against the US and China is dwindling.”
More freedom instead of more strategies
The last thing Europe needs is a new grand plan, Svenska Dagbladet counters:
“The Italian economist and former ECB chief Mario Draghi is undeniably right that the European continent's ability to grow is decisive. However, he is wrong when he says that there is a lack of an 'industrial strategy' and state and supranational investment in politically determined sectors. If strategies could boost economies, Europe would already be a world leader. ... Growth cannot be driven by plans, policies and good intentions. ... But with greater freedom economies can generally grow very well.”
This could relaunch the EU
El País is impressed by the scale of the plan:
“Less than 24 hours passed before the German and Dutch ministers raised objections, in particular against the issue of common debt. ... Perhaps Ursula von der Leyen's second commission should take this warning as an incentive to commit to an ambitious agenda. Perhaps there is an equivalent to Draghi's 'whatever it takes' of 2012 in the form of a huge investment plan that goes beyond numbers. With Berlin's (unlikely) permission, this would be a relaunch of the EU.”
A much needed kick in the butt
Sydsvenskan explains why the EU urgently needs to act:
“The challenge is enormous. Since 2000, real wages in the US have grown twice as much as in the EU. The GDP gap between the US and the EU has increased from 15 percent in 2002 to 30 percent in 2023, mainly due to low productivity in Europe. Only four of the world's leading technology companies are European. ... No, Monday's report is not a quick fix for a lagging EU. But at least it could be a kick in the butt.”
A to do list for the new Commission
The Financial Times calls for rapid implementation of the proposals:
“This includes integrating capital markets by centralising market supervision, developing new common funding pots, and aligning and streamlining industrial, competition and trade regulations. A broader push for closer co-operation on energy, innovation and national security is also welcome. Draghi's recommendations give newly re-elected European Commission president Ursula von der Leyen – who commissioned the report – a valuable framework for a new term.”
Stick together to remain sovereign
Draghi is absolutely right, warns economist and former senator Tommaso Nannicini in La Stampa:
“The only way to regain control is not to enclose ourselves within national borders and become slaves to decisions made elsewhere, from Washington to Beijing, but to build Europe's autonomy based on certain strategic axes. This is the conclusion of the Draghi report. The factors that have favoured European growth, from the expansion of international trade to the geopolitical stability guaranteed by the Pax Americana, have been swept away. The growth game is being played elsewhere.”
Cutting red tape is the top priority
Finally a key problem is being addressed, Les Echos writes:
“Mario Draghi, who made a name for himself in 2012 with his famous 'Whatever it takes' to save the euro, is resorting to the same measure today: a new economic recovery plan. However, the European Court of Auditors recently announced that by the end of 2023 EU countries had used less than a third of the funds earmarked in the previous programme. ... The report also notes that innovation here is 'hindered at every stage by inconsistent and restrictive regulations'. There's no better way to put it: cutting the red tape is the priority.”
Draghi raising hackles
The Irish Times anticipates resistance from various capital cities:
“To underpin investment, Draghi calls for an element of common fund-raising via a new EU debt instrument, a route certain to raise hackles in some European states. He also calls for a more nimble EU, involving not only a sharp cut in regulation but also the end of the national veto on new legislation in more policy areas. This will be sensitive in countries like Ireland, which has long protected the independence of tax policy.”
Too ambitious for Europe's procrastinators
Lidové noviny is sceptical:
“There is very little chance of this plan coming to fruition - despite the fact that the head of the EU Commission, Ursula von der Leyen, has said that she will use Draghi's proposals as a model for her team of commissioners. Instead, you can be sure that only a few of Draghi's proposals will be implemented and that Europe's decline will continue. Until Europeans realise that they have to do something, the illusion that we can preserve the European consensus by procrastinating, as Draghi so aptly put it, will continue. This is a comfortable highway to hell.”