EU's Urgent Economic Challenge: Coordinated Policy, Rapid Decisions, and Massive Investment Needed, Warns Draghi

Mario Draghi's report highlights the need for the European Union to adopt a more coordinated industrial policy, expedite decisions, and ramp up investments to compete economically with the United States and China. The report calls for enhanced investment, policy coordination, and new funding sources, emphasizing the urgency of addressing slow growth and productivity issues.

The European Union must implement a more coordinated industrial policy, make quicker decisions, and increase investment to remain economically competitive with the United States and China, Mario Draghi emphasized in a long-awaited report released on Monday. This report, commissioned by the European Commission a year ago, outlines strategies for keeping the EU's green and digital economy competitive amid growing global tensions.

Draghi highlighted the vulnerability of Europe's open economy during a news conference, calling for additional investment of 750-800 billion euros annually, equating to up to 5% of GDP. He stressed the need for significant action to counteract slowing growth, dwindling trade, and the loss of cheap energy from Russia.

The report argues that a lack of coordination and differing subsidy levels among EU countries are hindering the bloc's ability to compete on a global scale. Proposed solutions include extending qualified majority voting, enabling quicker decision-making, and potentially establishing new common funding sources to support crucial projects like defense and energy investments.

(With inputs from agencies.)