The Draghi Report - a year of indifference: zero reforms from the EU

The alarm signal sounded a year ago by Mario Draghi regarding European competitiveness seems to have failed to awaken the community institutions in Brussels from their inertia of immobility, shows the Euractiv website. In the summer of 2024, Mario Draghi, special advisor to Ursula von der Leyen, President of the European Commission, diagnosed in the report presented a European Union frozen in the lack of innovation, incapable of having large global companies, blocked by capital markets that refuse to finance growth and suffocated by a bureaucratic thicket that kills agility.

Twelve months after the publication of the report, the promises of action have dissipated, and of the 176 proposals, most are still lying in drawers in Brussels, according to the cited source. The European Union's R&D spending has remained at a mediocre 2.2% of GDP, well below those of the US, Japan or South Korea. Capital markets prefer to buy government securities and bonds rather than finance innovative companies, and the same is true of regulatory simplification: European legislation has produced a new wave of rules. Moreover, although Mario Draghi warned against a subsidy race between member states, the Commission has responded precisely by relaxing state aid rules. Meanwhile, the gaps are widening. While in 2011 the US and EU economies were almost equal, each at around $16 trillion, in 2025 the US, with a smaller population, will have an economy 1.5 times larger than the European bloc. Labor productivity, once comparable, is now a third lower in the EU than in the United States. The gap in research and development is colossal: Americans invest about $400 billion more annually than the entire European Union. While public debts and deficits are rising across the continent, investment that could generate growth is stalling.

Draghi called the challenge "existential.” We claim we have time, but the truth is that the window is closing fast. In strategic sectors such as artificial intelligence, quantum technologies or the green transition, the United States and China are racing ahead at a speed impossible to match with delayed policies. Meanwhile, European technology startups attract ten times less venture capital than their American rivals, and each delay widens the gap.

The source cited states that, under these conditions, the negative consequences can no longer be considered theoretical: without productivity growth, increasingly aging European societies will not be able to maintain decent living standards; without companies capable of competing globally, Europe will not dictate standards and will not secure its own technologies; without a vibrant economy, neither geopolitical power nor democracy will endure. The comet has already entered the atmosphere.

The authors of the analysis on the Euractiv website argue that there are solutions, many of which are clearly outlined in the Draghi report: massively increasing investment in research and development, mobilizing private economies towards productive venture capital, cutting the bureaucratic knots that block expansion in the Single Market. The agenda should be completed by a European ARPA-type agency to accelerate innovations in artificial intelligence, quantum and biotechnology, by a reform of the energy market to reduce the burden on energy-hungry industries, by a European Defence Industry Authority to consolidate procurement and create real scale, as well as by eliminating remaining barriers to cross-border business.

Unfortunately, there is currently no political will to implement the solutions proposed in the report prepared by Mario Draghi, who warned that Europe can no longer afford declarative summits and well-written reports, but needs decisive action. However, these are delayed, and the risk of the EU widening the gap with China and the US is increasingly present, which means a major negative impact on the competitiveness of the EU's industry and economy.